If you sign a letter for a company, then make sure that the company letterhead complies with the law and that your title appears under your signature or you might be personally liable.

The decision of Muneer Hamid (T/A Hamid Properties) v Francis Bradshaw Partnership [2013] EWCA Civ 470 is very clear on this point.

Facts: Dr Hamid signed a letter. The letter formed the basis of a contract.   Under Dr Hamid’s signature was his name and the trading name of the company that owned the business. The letterhead on which the letter was written also stated the trading name of his company – of which Dr Hamid was the sole director and sole shareholder. But, the letterhead did not comply with the law. Nor did the letter make it clear that Dr Hamid was not contracting personally.

As Dr Hamid did not put under his signature that he was signing as a director of the company, the question was asked, was Dr Hamid signing on his own behalf or as a director of the company?

Decision: The English Court of Appeal held that Dr Hamid became the contracting party and bound himself personally unless he qualified his signature or otherwise made it plain that the contract did not bind him personally. The Court also said that the other party to the contract did not have to do any searches to work out whether there was a company involved.

Lessons: Check that your letterhead complies with the law and that when you sign any correspondence coming from the company it has your job title/capacity under it.