The above title might sound a bit trite, but it is clear and would be most beneficial to you personally if you stay away from signing contracts where you are personally responsible for payment on that contract.

 

 

Of course, there are some contracts where you must sign both for your corporation and for you personally, such as bank credit lines or leases. BUT I spoke with another attorney recently who signed a lease in a very prestigious office building to settle his new law firm. The lease price was quite expensive. I remember saying to him: “Boy, you are really making high monthly payments for that spot.” He responded by saying “Yes,” but then he told me “but I am not personally responsible for the lease if the firm doesn’t succeed.”

 

 

Wow, I thought that was incredible. A new lease is a classic situation where the lessor wants to know that you are personally on the hook if your company is not successful, but this lawyer was sharp! He told the lessor that he would pay the high price but only if there were no personal liability! This was so smart and I thought so unexpected for a situation like this, but it did make me think—ALWAYS ask any party that you’re contracting with to agree to your company’s liability only, while NOT requiring your personal liability. This could save you from having to file personal bankruptcy if your company fails or it can’t afford to pay the monthly lease payment…