Signature Block Can Determine Whether Liability Falls to Individual or Business Entity

Posted by William J. Piercy on

Yim v. J’s Fashion Accessories, Inc., 298 Ga. App. 399 (2009), underscores the importance of clearly identifying the name of the business that an individual signs his name to a contract on behalf of, and the capacity in which he is signing.  Mr. Yim operated an apparel business incorporated as Hosung Enterprise, Inc., but doing business as Ho Tae.  Mr. Yim placed an order for and received goods from J’s Fashion.  Yim simply signed his name to the purchase order submitted to J’s Fashion without identifying Ho Tae or Hosung Enterprise as the business ordering the goods or that he was the representative of anyone or anything other than himself.

When J’s Fashion’s invoices for the goods went unpaid, J’s Fashion sued Mr. Yim to collect.  In his defense, Mr. Yim contended that he was the wrong party, that the goods didn’t go to him but to Ho Tae, that he was merely a representative of Ho Tae, and that it was Ho Tae that was responsible for the J’s Fashion invoices and not Mr. Yim.

In support of his position, Mr. Yin presented evidence that Hosung Enterprise, Inc. was properly registered as a corporation with the Georgia Secretary of State with Mr. Yim as its registered agent, that the Ho Tae trade name was registered with the Georgia Department of Revenue and that the businesses checks identified Ho Tae as the company’s trade name.

The Court was unimpressed and found Mr. Yim personally liable because in his dealings with J’s Fashions, he never identified himself as anything other than acting in his individual capacity and never identified Ho Tae or Hosung Enterprise, Inc. as the purchaser of the goods.