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TexLaw, Attorney
Category: Legal
Satisfied Customers: 4430
Experience:  Lead trial/International commercial attorney licensed 11 yrs
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my previous employee sign up third party electric provider

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my previous employee sign up third party electric provider for 3 years without my authorized. i want to cancel it but they toll my i have to pay early cancellation fee. the contract is under my previous employee name but he put my federal employer id in the contract. i wondering do i need to pay for the fee or my previous employee has to pay?

My name is XXXXX XXXXX I will be assisting you with your legal question.

Just to make sure that I am straight on the facts before I answer your question, was the electricity supplied for use in your business?

Also, you are saying that the employee signed the contract under his name, but does the contract mention the business as the customer?

Have you seen the actual contract?
Customer: replied 3 years ago.

yes, electricity supplied for my business. what do you mean "the business as the customer"

I mean, did the employee sign up as the actual customer, or did he sign the contract for your business name?

Is your business incorporated or operating under a DBA?
Customer: replied 3 years ago.

he sign the contract on the phone. when the company ask what is his name, he said his own name and he said he is the authorizer. but he use my business name, address and federal employer id without my authorized.

Thank you for clarifying that issue.

Where an employee signs a contract without authorization, the question of whether the company is bound by the contract is determined by whether it has ratified the action and whether the employee has apparent authority to sign the contract. Whether the employee has apparent authority is determined from the perspective of the other party.

In your case, if the employee was not a manager and had no signing authority ever, then the employee does not arguably have apparent authority. This would mean that you should arguably be allowed to get out of the contract even though the business has used the electricity provided.

My recommendation is to send them a certified letter formally terminating the electricity contract and requesting that the account be moved to your chosen provider. In form the current company that the contract was signed without authorization by a low level employee and that their sales people violated state electricity marketing laws by letting the employee sign the contract instead of asking for someone with contracting power from the business.

At the same time, you should file an informal complaint with the PA Public Utilities Commission at:

This will start the process where you have an advocate contacting the electricity company to enforce your request to terminate the contract.

Please let me know if you have any further questions. Please also kindly consider rating my answer positively so that I am credited by the website for my work on your question. Rating positively does not cause an additional charge and does not prevent us from further discussing your questions.

Kind regards,
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