"Stop And Identify" Yourself, To Avoid Personal Liability When Acting On Behalf Of A Company

Third parties must know exactly who they are entering into a contract with, especially when dealing with a limited liability company. That said, the identity of the true contracting party may not be clear when an officer, director or employee of a company is negotiating on behalf of the company. Indeed, third parties are generally entitled to believe that these individuals are dealing on their own behalf, rather than on behalf of a company to which they are outsiders.

Therefore, in order to avoid personal liability, it is imperative to identify the company you are acting for! Many jurisdictions (including British Columbia and Quebec) have created statutory obligations regarding the use of the name of a company. These are of great use in identifying the company as the actual contracting party, and they should be kept in mind to avoid the unintended consequences reflected in the recent British Columbia Court of Appeal case Pageant Media Ltd. v. Piche, 2013 BCCA 537,