Salzman Sign Co. v. Beck

In Salzman Sign Co. v. Beck (10 NY2d 63 [1961]), the New York Court of Appeals dealt with a similar case. The plaintiff in Salzman attempted to personally bind the officer of a corporation as a guarantor with a paragraph in the contract stating: "Where the Purchaser is a corporation, in consideration of extending credit to it, the officer or officers signing on behalf of such corporation, hereby personally guarantee the payments hereinabove provided for" (Salzman at 65). The Court held that the contract clause was insufficient to charge the signing officer as a guarantor. In modern times most commercial business is done between corporations, everyone in business knows that an individual stockholder or officer is not liable for his corporation's engagements unless he signs individually, and where individual responsibility is demanded the nearly universal practice is that the officer signs twice once as an officer and again as an individual. There is great danger in allowing a single sentence in a long contract to bind individually a person who signs only as a corporate officer. In many situations the signing officer holds little or no stock and if the language of the agreement makes him individually liable his estate may be stuck for a very large obligation which he never dreamed of assuming. We think the better rule is the one used here that is, that the statement in the contract purporting to bind the signing officer individually is not sufficient for Statute of Frauds purposes without some direct and explicit evidence of actual intent. (Salzman at 67.)