84-3-402. Signature by representative. (a) If a person acting, or purporting to act, as a representative signs an instrument by signing either the name of the represented person or the name of the signer, the represented person is bound by the signature to the same extent the represented person would be bound if the signature were on a simple contract. If the represented person is bound, the signature of the representative is the "authorized signature of the represented person" and the represented person is liable on the instrument, whether or not identified in the instrument.
(b) If a representative signs the name of the representative to an instrument and the signature is an authorized signature of the represented person, the following rules apply:
(1) If the form of the signature shows unambiguously that the signature is made on behalf of the represented person who is identified in the instrument, the representative is not liable on the instrument.
(2) Subject to subsection (c), if (A) the form of the signature does not show unambiguously that the signature is made in a representative capacity or (B) the represented person is not identified in the instrument, the representative is liable on the instrument to a holder in due course that took the instrument without notice that the representative was not intended to be liable on the instrument. With respect to any other person, the representative is liable on the instrument unless the representative proves that the original parties did not intend the representative to be liable on the instrument.
(c) If a representative signs the name of the representative as drawer of a check without indication of the representative status and the check is payable from an account of the represented person who is identified on the check, the signer is not liable on the check if the signature is an authorized signature of the represented person.
History: L. 1991, ch. 296, § 39; February 1, 1992.
KANSAS COMMENT, 1996
This section is identical to the 1995 Official Text except that the lower case roman numerals have been replaced by capital letters. It is derived from the provisions of the former 84-3-403, and the substantive law has been changed, reducing the number of situations in which the agent is personally liable. Historical case and statutory references can be obtained from the 1965 and 1983 bound volume 7 of the Kansas Statutes Annotated.
The section is primarily concerned with defining when an agent ("a representative") is liable on an instrument. Under the new rules, a principal ("the person represented") is always liable for the acts of the agent. The more difficult question, however, is determining when the agent is also liable, a question of critical importance only when the principal is insolvent or unavailable, and the agent is the only party who can satisfy a judgment.
Subsection (a). The subsection reiterates that the signature of an agent can bind the principal on the instrument, even if the principal's name is not on the instrument, a change from prior law.
Subsections (b) and (c). The section creates different rules regarding agent liability on all instruments other than checks (subsection (b)), from the agent's liability on a check (subsection (c)). Paragraph (1) states the general rule, providing that the agent is not liable if the instrument shows unambiguously that the agent signed on behalf of the principal. The classic way for an agent to sign as an agent only is to state three elements, the agent's name, the agency, and the principal's name. Ideally, these will all be together at the signature, as stipulated in paragraph (1).
Subparagraph (2)(A) provides that an agent is liable to a holder in due course without notice if "the form of the signature does not show unambiguously that the signature is made in a representative capacity." Under this standard, the agent needs to indicate the agency in the signature, but the principal could be named elsewhere in the instrument, possibly in the title. The Official Comment states that a subsequent holder in due course should be able to resolve any ambiguity in favor of the agent's liability.
Subparagraph (2)(B) will cause the agent to be liable to a subsequent holder in due course without notice if the principal is not "identified" in the instrument. The Official Comments indicate this was intended to change prior holdings requiring the legal name of the principal on the instrument.
In both of the above cases, agency is a personal defense of the agent. The agent is not liable to a mere holder, or to a holder in due course with notice of the agency.
Subsection (c) creates a special rule for checks, largely negating agent liability. The agent acting as agent is not liable if the check is payable from the principal's account and the principal is identified on the check. Since the subsection requires the signature be an authorized signature, the agent presumably is personally liable on the instrument if the signature is not authorized.
Revisor's Note:
Former section 84-3-402 was repealed by L. 1991, ch. 296, § 111 and the number reassigned to the current text.
CASE ANNOTATIONS
1. Authorized corporate representative found not personally liable on a corporate account check under worthless check statute. Lafarge North America Inc. v. Homeland Ready-Mix, 697 F. Supp. 2d 1230 (D. Kan. 2009).
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