A signature block in a contract seems like a small thing, but sometimes it can lead to litigation.  When an officer signs a contract, is he signing solely as agent for the corporation or might he also be signing in his individual capacity?  In 1993, future presidential candidate Donald J. Trump faced just that question in a Nevada courtroom.

The case arose when Trump Taj Mahal Associates entered into an employment agreement with the then president and CEO of a hotel and casino owned by GNLV Corp., a Mr. Dennis Gomes.  Steve Wynn was Chairman of the Board of GNLV and Mr. Gomes’ immediate supervisor. Reportedly, Messrs. Trump and Wynn shared a mutual animus.  Evidently, the hiring away of Mr. Gomes did not improve their relationship. GNLV responded by suing Mr. Trump individually for intentional interference with contractual relations.  Mr. Trump moved to quash service on the basis of a lack of personal jurisdiction.  GNLV argued that personal jurisdiction could be based on Mr. Trump’s having acted individually as well as in a corporate capacity when he signed the employment agreement that fomented the fight.  The signature block was as follows:

TRUMP TAJ MAHAL & ASSOCIATES
by its general partners dba
TAJ MAHAL HOTEL & CASINO

By /s/ Donald J. Trump
President

By /s/ Donald J. Trump

Note that Mr. Trump signed twice.  He may have done so because Trump Taj Mahal & Associates had two corporate general partners.  However, that doesn’t explain the absence of a title beneath the second signature.  The Nevada Supreme Court in Trump v. District Court, 109 Nev. 687, 857 P.2d 740 (1993) provided the following explanation:

The manner in which Gomes’ employment contract was signed constitutes prima facie evidence that Trump personally guaranteed the terms of the contract. In addition, GNLV introduced evidence of personal animosity between Wynn and Trump. Trump’s two signatures on Gomes’ employment contract, along with his known antagonism for Wynn, suggest that Trump acted as an individual and in part for personal purposes in entering into the Gomes employment contract.

The result was that Mr. Trump was unsuccessful in his attempt to quash service.  

An argument about an argument

 UCLA Law School Professor Stephen Bainbridge recently critiqued Michael W. Peregrine’s critique of the soidisant Commonsense Corporate Governance Principles.  Professor Bainbridge criticizes Mr. Peregrine for making an “argument from authority” and provides the Latin phrase argumentum ad verecundiam.  That is how the phrase is usually translated and hence commonly understood.  However, that is not a direct translation.  Rather, the phrase translates more directly to “having argued to shame”.  Admeans “to” or “towards”, not from, and verecundiam means shame or modesty, not authority.  I think a literal translation better captures how an argument from authority works – the invocation of a higher authority shames an opponent into acquiescence.  Lawyers, of course, are always arguing to the authority – the authority of precedent.