You spend a considerable sum of cash to have your
lawyer set up your contracting business as a corporation, an LLC or LLP, so
that your backhoe, your pickup and your tools may be at risk, but your house,
your Cadillac and the money you have set aside for sending the kids to college
is not exposed. Then you walk onto a job site or into a customer’s office and
tell them “I guarantee the work,” and all that costly legal paperwork goes
right down the drain.
As a court in Pennsylvania recently held, and as
most other courts would follow, using the word “I” can expose you to personal
liability where your business would otherwise be the only entity responsible
under a contract or statute respecting the project. “We” refers to your
corporation, company, business or firm; “I” refers to yourself personally – you
can’t afford to ever forget the difference.
The Pennsylvania case is Bennett v. A.T.
Masterpiece Homes, 2012 Pa. Super 60 (2012). Two home buyers sued A.T.
Masterpiece LLC and its managing member Grant Colledge for construction defects
in their brand new homes. A jury verdict against both A.T. Masterpiece and
Colledge personally was affirmed on appeal, though Colledge argued that the
home buyers had contracted only with A.T. Masterpiece, and not with him
individually. The Pennsylvania Superior Court, in affirming the verdict and
judgment against Colledge individually, held that Colledge’s statements at the
construction sites to the homeowners that “I guarantee it,” or “I will take
care of it,” constituted a personal assumption of liabilities for correcting
the work of his business which he would not have had in the absence of his
remarks.
So, whether your name is Colledge, Walsh, Turner,
Pepper or something else, “we” refers to your contracting business, and “I”
refers to yourself personally – you forget the distinction at considerable
financial peril.
