Corporate
May 18, 2017
Contracts may hold up, even if signer had no authority to bind
In a recent appellate ruling, the court determined that third parties may benefit from a statutory safe harbor whereby an agreement is binding on an LLC even if the "manager" signing has no authority to sign. By Iain Mickle and Andrea Bacchi
Iain Mickle
Shareholder
Boutin Jones Inc.
555 Capitol Mall Ste 1500
Sacramento , CA 95814-4603
Phone: (916) 321-4444
Fax: (916) 558-6210
Email: imickle@boutinjones.com
UC Hastings
In Western Surety Co. v. La Cumbre Office Partners, LLC, 8 Cal. App. 5th 125 (Cal. Ct. App. 2d Dist., Feb. 2, 2017), a limited liability company was subjected to claims for $6.07 million under an indemnity agreement even though the agreement was signed by an individual with no authority to bind the LLC and the agreement bore no relationship to the LLC's business. The court determined that third parti...
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