What You Need to Know

• No Two-Signature Requirement – New Jersey does not impose a bright-line rule requiring separate signatures for corporate and individual obligations.
• Intent Controls – Courts enforce personal guaranties only when the individual clearly manifests an intent to be personally bound.
• Drafting Guidance – To impose personal liability on corporate officers, drafters should either:
  • Prepare a separate personal guaranty agreement;
  • Include dual signature lines in the same document; or
  • Clearly articulate in the agreement that a single signature binds the officer individually in addition to the corporation.

Introduction

In Extech Building Materials, Inc. v. E&N Construction, Inc., 260 N.J. 63 (2025), the New Jersey Supreme Court considered whether a corporate officer can be personally liable for a company’s debt through a single signature on a corporate agreement. The Court held that a valid personal guaranty requires an unambiguous manifestation of intent, and confirmed that a single signature on a corporate contract does not automatically suffice to impose personal liability.

Background

Plaintiff Extech Building Materials, Inc. (“Extech”) entered into an agreement with Defendant E&N Construction, Inc. (“E&N”) to facilitate the sale and delivery of building materials. The agreement contained 6 provisions, the sixth of which noted, “IN CONSIDERATION OF EXTECH BUILDING MATERIALS, ITS SUBSIDIARIES OR AFFILIATES EXTENDING CREDIT, WE JOINTLY AND SEVERALLY DO PERSONALLY GUARANTEE UNCONDITIONALLY, AT ALL TIMES, TO EXTECH, ITS SUBSIDIARIES OR AFFILIATES, THE PAYMENT OF INDEBTEDNESS OR BALANCE OF INDEBTEDNESS OF THE WITHIN NAME[D] FIRM. THIS GUARANTEE SHALL CONTINUE UNTIL 10 FULL BUSINESS DAYS AFTER GUARANTOR SENDS A WRITTEN REVOCATION OF THE GUARANTEE TO EXTECH.”

Two E&N representatives signed the document, one of whom was Joaquim G. Ferreira, the purported president of E&N. Under each of the signature lines in agreement were the pre-printed words, “No Title,” leaving unclear whether the representatives were signing the agreement on behalf of E&N, personally, or both.

After signing, Extech supplied materials pursuant to the agreement, but E&N failed to remit payment. Extech therefore filed a lawsuit against E&N and both representative signatories, claiming that the representatives were personally liable.

During discovery, Extech moved for summary judgment against both representatives. Ferreira cross-moved for dismissal of the claims against him, and the other representative joined in Ferreira’s cross-motion.

As to Ferreira’s cross-motion, the trial court emphasized that there was no evidence to impose personal liability since there was no separate and distinct obligation making clear that the representatives were responsible as guarantors for the debt. Accordingly, the trial court granted summary judgment in favor of Ferreira and dismissed the complaint against the other representative.

The Appellate Division reversed, holding that factual disputes regarding intent precluded summary judgment and reinstated Extech’s claims. Only Ferreira appealed to the Supreme Court, which granted certification. The question before the Court was whether a corporate officer can be personally liable under a contract executed on behalf of a company with a single signature.

The Court’s Analysis

Ferreira argued that any ambiguous guaranty language must be construed strictly against Extech and that it was impossible for him to have signed both in his corporate and personal capacities simultaneously because the New Jersey Supreme Court, in previous cases, required a separate signature to impose personal liability. The Supreme Court rejected this interpretation explaining that neither Ligran, Inc. v. Medlawtel, Inc., 86 N.J. 583 (1981) nor Cruz-Mendez v. ISU/ Insurance Services of San Francisco, 156 N.J. 556 (1999), two cases upon which Ferreira relied, established a bright-line dual-signature rule.

In Ligran, the Court explained that the main issue did not concern whether the defendant needed to sign twice to be bound as a guarantor; rather the Court merely observed that an officer often signs twice, as corporate representative and as individual guarantor, but did not require a separate contract or dual signatures for personal liability.

Similarly, in Cruz-Mendez the Court explained the conceptual and legal distinction between surety and guaranty obligations but did not mandate dual signatures or a separate contract for guarantor-creditor agreements. Accordingly, no New Jersey case imposes a per se two-signature rule.

Extech argued that a single signature could suffice if the agreement, viewed in context, demonstrated the signer's intent to bind themselves personally, and that contract law provides sufficient guidance to resolve ambiguities without imposing a rigid two-signature requirement.

In reaching its decision, the Court noted that an officer does not become a guarantor of a corporation’s obligation simply by signing the contract by virtue of a corporate position. Instead, New Jersey law emphasizes the intent of the parties, the express terms of the contract, and surrounding circumstances of the agreement. The dispositive question remains whether the officer intended for the single signature to serve in a dual capacity. The Court reiterated that a personal guaranty must be stated in clear, explicit terms, especially when one is contracting with an individual on the credit of another. It also noted that the Statute of Frauds requires any personal guaranty to be in writing and signed, with no uncertainty about the guarantor’s intent to assume personal liability.

The Court emphasized that personal liability hinges on the unambiguous manifestation of intent. This clarity is required because a guaranty is a separate legal obligation binding an individual that would otherwise fall outside the scope of the underlying contract.

There are three recognized methods for a corporate officer to personally guarantee a corporate obligation:

1. Separate Guaranty Agreement – Executing a distinct document establishing personal liability;
2. Dual Signatures – Signing the contract once for the company and once individually; and
3. Explicit Single Signature – Signing once, with contract language clearly stating the officer’s intent to assume personal liability.

The Court noted that the third method requires exceptionally clear language to avoid ambiguity. Language such as a clearly defined personal guaranty clause or specifying the capacities in which the signer acts may suffice.

Here, Ferreira did not execute a separate personal guaranty, did not sign the agreement twice, and did not sign a single document that explicitly stated his intention to bind himself personally. Accordingly, the Court concluded that Ferreira did not manifest intent to personally guarantee E&N’s debt. The Supreme Court reversed the Appellate Division, reinstating summary judgment in Ferreira’s favor.

Takeaways

This case underscores the strict standards for creating personal liability for corporate representatives and reinforces the principle that consent must be explicit when imposing obligations beyond those of the corporate entity.

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com or Keshav Agiwal at kagiwal@riker.com.