Most of the time the names on an outdoor advertising contract are scribbled in at the last minute.  The names on the contract matter immensely when it’s time to collect.  Here’s an interesting case involving Adams Outdoor.

• John Dangerfield opened a restaurant called Johnny’s Suzuki in South Carolina in 2005.  The restaurant was managed by a company called Johnny’s Enterprises, Inc.

• John Dangerfield signed an outdoor advertising contract with Adams Outdoor on behalf of Johnny’s Suzuki.

• Johnny’s Enterprises made a series of payments under the contract and then defaulted.

• In 2008 Adams Outdoor sued John Dangerfield for $100,317 in unpaid bills under the contract.

• John Dangerfield disputed the payment by saying that he was not a party to the contract.  He claimed that Johny’s Enterprises, Inc. dba Johnny’s Suzuki was the contracting party.

• The lower court and appeals court  held in Adams favor.  The Court found that the contracts were between Dangerfield dba Johnny’s Suzuki and Adams.  Here is the court reasoning:   “The name “Johnny’s Enterprises” does not appear anywhere on the contracts, and Dangerfield signed the contracts without any indication he was signing on behalf of Johnny’s Enterprises. Furthermore, there is no evidence in the record Adams knew Dangerfield was acting on behalf of Johnny’s Enterprises. “

Insider’s take: To avoid protracted legal disputes over payments outdoor ad contracts should be clear about the  actual legal name of the entity entering into the contract, for example [legal name] dba [business name].  Your ad contracts should also make clear whether a business owner is personally guaranteeing.  Adams prevailed because because the contract was signed by John Dangerfield on behalf of Johnny’s Suzuki.  Had the contract been signed by John Dangerfield on behalf of Johnny’s Enterprises, Inc. Dangerfield would probably not have been personally liable unless the contract said that he was providing a personal guarantee.

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