Am I liable if my employee signed a contract?

Question Details:

In 2007 I had a security system installed at my business. My understanding was that I paid $888 for the equipment, installation and 3 years of monitoring. They started sending me a bill after 3 years and after numerous calls of me telling them that I didn't want the monitoring service they informed me that I signed a 5 year contract. I told them that I did not and to send it to me, which they did. It turns out that it was signed by an employee. When I told them that they said I was still liable. Am I?

Asked 11/10/2009 under Business | 235 View(s) | More Legal Topics

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Business Law Answers

You accepted the installation of the system, which was part of that contract, so a court would almost certainly say that you "ratified" your employee's signing the contract for your company.  From your question, it sounds like you were the one who got the process started in the first place, with the employee signing the contract (when the alarm company followed up) because you probably weren't available at the time.

The other problem you'll have, fighting this, is that there's a good chance that the court would also find that the employee had "apparent authority" to sign, even if they actually didn't, so you're bound.  This will depend on the employee's job title at the time;  as long as it wasn't the receptionist or the custodian, you may have to live with this.

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