When Things Go South: A Corporate Director’s or Officer’s Personal Liability to Third Parties for Corporate Misdeeds
Generally, corporate officers and directors do not have a special relationship of trust (i.e., a fiduciary relationship) with third persons or creditors transacting business with the corporation. Moreover, unless they sign in an individual capacity, corporate officers and directors who negotiate and execute a contract on behalf of the corporation are not personally accountable on the contract, even if the corporation later defaults or otherwise breaches the contract. Likewise, corporate officers and directors will not be personally liable for the debts of the corporation, even if involved as an agent of the corporation in undertaking the debt.