Recent Developments

Issues that affect ministers and churches
Contracts
An Ohio court ruled that a church was bound by a contract modification signed by an associate pastor because he had "apparent authority" to sign the modification.
Key point.Contract Liability Clergy who sign legal documents in their own name with no indication that they are signing in a representative capacity on behalf of their church may be personally liable on the document.
Key point.Church Officers, Directors, and Trustees Church board members may be personally liable for contracts they sign if they do so without authorization, or if they fail to indicate that they are signing as a representative of the church.

An Ohio court ruled that a church was bound by a contract modification signed by an associate pastor because he had "apparent authority" to sign the modification. An architect entered into a contract with a church that called for an architect's fee of $30,000 in connection with a construction project. The architect later sent a letter to the church's associate pastor, in which she stated that her fee had increased by $25,000. The associate pastor circled the $25,000 addition, signed the letter, and sent it back to the architect. As a result, the architect claimed that the church owed her $55,000. The church insisted, however, that the associate pastor did not have the authority to sign a contract modification, and therefore it only owed the architect the original fee of $30,000. The architect sued the church for the full amount. The question before the court was whether the associate pastor had the legal authority to bind the church. The trial court ruled in favor of the architect, and the church appealed.

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Posted: November 1, 2001
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