Are You Signing Your Contracts Correctly?
Signing your contract seems like a no-brainer, you just plop your signature on the line, right? Well, maybe?...But there are a few things you should consider when you're signing your client contracts before you type or sign your name.
1. If you're entering into a contract with a client...
...then you're signing your agreement as your company. This doesn't mean you're actually signing your company's name (see the example below.) Someone who has the authority to sign documents on behalf of your company signs their name, and indicates their position within the company. Generally, someone who has the power to sign contracts is someone who has the authority to make decisions by themselves without the input of others, like an owner of a company. So, for example, if a receptionist signed a client contract and didn't have the authority to do so, the contract may be considered void and therefore worthless because the receptionist didn't have the authority to enter into a contract on the company's behalf.
2. If you've married and changed your name...
...then you're signing your contract as your legal name. So, for example, if you've legally changed your name, you're signing your contract as your new name, even if the name of your company is different and still has your maiden name. If you haven't legally changed your name yet, you're still signing your contracts as your maiden name.
Here's some examples:
3. If you have a company...
...your company is properly named and your title is properly listed. These two things help clarify exactly who and how you are entering the agreement. It also shows that your company is entering into the agreement, rather than you entering the contract on a personal level. By signing the agreement as the owner of your company, rather merely your name, you help limit your personal liability should any big problems arise later, as it is your company entering into the contract and not you. So, if big problems pop up, someone can come after your business assets (business funds, trademarks, etc.) but typically not your personal assets (car, house, kid's college fund, etc.)
Even if you don't have an LLC or C-Corp, you can still sign as your company (like the Mickey Mouse example below, without the "LLC.")
Check it out in an example:
Alternatively, here's how Mickey Mouse would sign if he didn't have an LLC:
Questions? Comments? Email me, or if you found it helpful, pass this article along to a friend who could use it.