A sales representative of Wired Music, Inc. sold Frank Pierson, president of the

Question

A sales representative of Wired Music, Inc. sold Frank Pierson, president of the Great River Steamboat Company, a five-year Muzak Program Service for a riverboat and restaurant owned by Great River. Pierson signed a form contract drafted by Wired Music in the following manner:

By /s/ Frank C. Pierson, Pres./ Title

The Great River Steamboat Co.

Port of St. Louis Investment, Inc./ For the Corporation

In signing, Pierson crossed out “Port of St. Louis Investments, Inc.,” which had been incorrectly listed as the name of the corporation, and inserted the proper name. The contract included the following clause arguably making Pierson a surety or guarantor for Great River: “The individual signing this agreement for the subscriber guarantees that all of the above provisions shall be complied with.”

Great River made approximately four payments under the contract and then ceased to pay. Wired Music brought an action for contract damages against Pierson personally.

Is Pierson personally liable to Wired Music?

Explanation / Answer

The general clause regarding liability is when a person signs an instrument on behalf of the principal; the liability will be that of the principal and not of the agent. Pierson signed the agreement, in his capacity as president of the corporate entity whatever its precise name, and not in his individual capacity, for as appears he signed as `Pres.' and `For the Corporation.' The capacity of Pierson was not personal but corporate as he signed as president.

Pierson will not be personally liable for the contract damages to Wired Music.

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