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Setting the bar too high: Do both parties need to sign the contract?

If your contract indicates that both parties must sign, and it turns out that you didn’t sign it, then you might not be able to enforce it, even if the other side did sign it.  That hap­pened in a Fifth Circuit case:

Kimberly Huckaba, a former employee of Ref-Chem, L.P., appeals the district court’s judgment compelling arbitration.

Because the express language of the agreement at issue requires for it to be signed by both parties

and because it is undisputed that Ref-Chem [i.e., the employer] did not sign the agreement,

we REVERSE and REMAND.

Huckaba v. Ref-Chem, L.P., No. 17-50341, slip op. at 1 (5th Cir. June 18, 2018) (extra paragraphing added).  (Hat tip: Arbitration Info.)

The court explained:

The arbitration agreement at issue here contains: (1) a statement that
“[b]y signing this agreement the parties are giving up any right they may have to sue each other;” (2) a clause prohibiting modifications unless they are “in writing and signed by all parties;” and (3) a signature block for the employer, Ref-Chem. This express language clearly indicates an intent for the parties to be bound to the arbitration agreement by signing.

The agree­ment also identifies the parties in the first line as “[t]he org­an­iza­tion referred to above (‘Employer’) and the Employee, whose signature is af­fixed hereto.” This clause makes clear the parties’ intention that Huckaba would sign the agreement. It does not negate the other ref­er­en­ces to all parties signing.

Ref-Chem is right  when it notes that Texas courts have held that a sig­na­ture block by itself is insufficient to establish the parties’ intent to require sig­natures. But in this case, we have more than a blank signature block that speaks to the parties’ intent. The agreement also contains language that the parties needed to sign the agreement to give it effect or to modify it. Thus, the question of Ref-Chem’s intention is answered by the agreement it drafted.

Id., slip op. at 4-5 (cleaned up; emphasis and extra paragraphing added).

Drafting tips: 

1. When drafting a “canned” contract form such as an employment agreement or a guar­anty, consider including an express waiver of signature, such as in the Common Draft guaranty language.  In the same vein, here’s language that I recently included in a client’s employment-agreement form:

I agree that the Company need not sign this Agreement and waive any right I might have to be notified that the Company has accepted this Agreement.

2. Consider also including a statement that continued employment will cons­ti­tute acceptance of the agreement’s terms — not just that continued em­ploy­ment is consideration for the agreement. See id. at 6-7, dis­ting­uish­ing In re Halliburton, 80 S.W.3d 566, 568-69 (Tex. 2002).

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