How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask J.Hazelbaker Your Own Question
J.Hazelbaker
J.Hazelbaker, Attorney
Category: Business Law
Satisfied Customers: 4385
Experience:  Experienced and trained in the area of business law.
15393114
Type Your Business Law Question Here...
J.Hazelbaker is online now
A new question is answered every 9 seconds

My Daughter worked as a secretary for a construction company

Resolved Question:

My Daughter worked as a secretary for a construction company (Corporation) that is no longer in business due to Banks pulling their lines of credit. While there she applied for and signed a credit application to a local vendor. On the credit application, in small print, it said by signing the credit application that she was personally responsible for any debt incurred.
The vendor has now filed an action against her in municipal court and not the Corporation.

My questions are:
1) Can that vendor legally go after her for a corporations debt?
2) Is there an Ohio Statute that protects her from this?
3) Shouldn't the vendor have asked for a corporate resolution giving her permission to sign on the corporations behalf?
4) Is that credit application even valid because it was not signed by an officer of the company?
5) How should she file her answer to the court?
Submitted: 5 years ago.
Category: Business Law
Expert:  J.Hazelbaker replied 5 years ago.

J.Hazelbaker :

Hello. Thank you for using JustAnswer.

J.Hazelbaker :

I will answer your questions in order:

J.Hazelbaker :

1) the vendor can legally go after her, but there is a good chance that she will prevail (see #2);

J.Hazelbaker :

2) there is no statute that specifically addresses this situation. It's dealt with under principles of contract and agency law. Her defense is that she signed in her capacity as agent for the company under the company's authority and at the company's direction. As such, she does not have personal liability for the debt, notwithstanding the fine print regarding personal liability.

J.Hazelbaker :

As an agent, there is no personal liability and this is further bolstered by the fact that the personal liability was not made apparent, but was hidden in the small print of the contract.

J.Hazelbaker :

This should be her defense to the suit laid out in her "Answer", which is due 28 days from the date she received the summons/complaint.

J.Hazelbaker :

3) the vendor does not need to ask for a corporate resolution unless there are circumstances that lead the vendor to believe the asserted agent does not have authority. I would not go down this route if I were you because, if it were found that a corporate resolution were needed, your daughter may lose her agency argument.

J.Hazelbaker :

4) the credit application could be valid even if not signed by an officer, as long as your daughter--as agent--was instructed to sign the application by someone with authority.

J.Hazelbaker :

5) she should deny the allegations in the complaint that she owes the debt. She should state the facts discussed above in #2. She should ask the court to dismiss the case for lack of jurisdiction and "failure to state a claim upon which relief can be granted against this defendant in her personal capacity".

J.Hazelbaker :

Please let me know what follow-up questions you have. If my above responses have been helpful, please click Accept so that I get credit for the time/effort. You may always restart the thread and ask follow-up questions at any time by clicking the “Reply” button at the bottom of the question/answer thread. You can access this thread later in your profile under the “My Questions” tab.

J.Hazelbaker and other Business Law Specialists are ready to help you