If I close my business due to health reasons, do I still have to honor my warranties?
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If I close my business due to health reasons, do I still have to honor my warranties?
I own a small remodeling business and am considering closing the business in the near future for health reasons. My concern is that I have done a lot of work for local municipalities in the area, each of which always has in their contacts that I need to warranty my workmanship on the project for “X” years. If I close the business and am contacted later that a defect in my workmanship had developed (within the original contacts warranty time-frame of course), am I still legally obligated to personally remedy the situation or pay to have it remedied? I am the owner and person who would have put my signature on the contracts or will they not be able to expect any warranties to be honored because the business has been closed?
Asked on July 10, 2015 under Business Law, Wisconsin
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 9 years ago | Contributor
The issue is not whether you signed, but 1) what was the nature of your business; and 2) how did you sign?
If the business was an LLC (limited liability company) or corporation and you signed not in a personal capacity but as a representative, owner, or manager of the company, you would not be personally liable: only the business would be, and if the business has been closed, that takes care of that.
If you were sole proprietorship however, there was no separate business entity--only you. So if you signed the warranties, which are contracts, you personally obligated yourself for their full duration, unless there was some language in the warranty which would, under these circumstances, allow you to escape your obligations.
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