The Personal Liability Trap: When Signing “As Manager” Still Makes You Personally Liable

One of the most common misconceptions among business owners is that forming an LLC or corporation completely shields them from personal liability. While these entities provide strong protection, the way you sign contracts can pierce that shield—and leave you personally on the hook.

Why Your Signature Matters

Courts look closely at how contracts are signed. If you sign your name without clearly identifying your role, or if the contract language is sloppy, you may be treated as though you promised to perform—not just your company.

Common Mistakes That Create Personal Liability

• Signing Without Title: Just putting “John Smith” instead of “John Smith, Manager, ABC LLC.”
• Hidden Guaranty Language: Clauses buried in leases, loan agreements, or vendor contracts that make the signer a guarantor.
• Ambiguous Signature Blocks: Contracts where it’s unclear whether you signed personally or on behalf of the entity.
• Mixing Roles: Signing sometimes as the business and sometimes individually in related documents.

A Question I Hear All the Time

Clients often ask: “If my business defaults, am I personally on the hook?” My answer is: it depends how the contract was drafted and how you signed it. In many cases, business owners think they signed only as “manager” or “president,” but the fine print says otherwise.

Why This Trap Matters

Even if your company fails or dissolves, a personal guaranty or poorly signed agreement can expose your personal assets—your savings, your home, even future income. Landlords and lenders in particular rely on these traps to secure leverage against small businesses.

How to Protect Yourself

• Review Signature Blocks: Make sure the entity—not you—is clearly listed as the contracting party.
• Watch for Guaranty Language: If you see the word “personally” or “guarantor,” think twice before signing.
• Stay Consistent: Always sign with your title (e.g., “Manager, Member, President”) and make sure the contract identifies the entity properly.
• Get Legal Review: A quick review before signing can prevent years of personal liability.

Don’t Let a Signature Cost You Personally

At JDE Law Firm, PLLC, we review and negotiate contracts to make sure business owners stay protected. If you’ve already signed something you’re unsure about—or if a landlord or lender is trying to enforce a guaranty—we’ll fight to protect your rights and your assets.

📞 NY: 718-966-0877 | NJ: 732-490-7120

👉 Book a Contract Review Consultation