Commercial Division Blog

Posted: January 22, 2017 / Categories Commercial, Contracts

Corporate Officer Not Bound by Corporation's Contracts

On January 12, 2017, Justice Scarpulla of the New York County Commercial Division issued a decision in Bondoc v. Sklar, 2017 NY Slip Op. 30058(U), holding that a corporate officer was not bound by the corporation's contracts, explaining:

Generally, an officer or director of a corporation is not personally liable to one who has contracted with the corporation on a theory of inducing a breach of contract, merely due to the fact that, while acting for the corporation, he has made decisions and taken steps that resulted in the corporation's promise being broken. An agent for a disclosed principal will not be personally bound unless there is clear and explicit evidence of the agent's intention to substitute or superadd his personal liability for, or to, that of his principal.

In the complaint, plaintiffs do not allege ·any facts that might be interpreted as evidencing an intent by Ligaya Avenida· or Ron Avenida to be personally bound on the
alleged oral contract or the Avenida fee agreement. Plaintiffs do not allege any facts that might indicate that Ligaya Avenida or Ron Avenida exercised complete dominion and control over the corporate Avenida defendants.

(Internal quotations and citations omitted).