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The Ohio Court of Appeals held that a company president, who signed a contract as president rather than in his individual capacity, could not enforce the contract's arbitration clause because he was not a party to the contract.
In Corporate Floors, Inc. v. Lawrence Harris Construction, No. 88464, 2007 WL 1559515 (Ohio Ct. App. May 31, 2007), Corporate Floors (CFI) sued Lawrence Harris Construction (LHC) and its president, Lawrence Harris. The suit arose from LHC's failure to make payments due under a contract.
The contract contained an arbitration clause, so LHC and Harris moved to stay the action, pending arbitration. The trial court granted LHC's motion but denied Harris' motion on the ground that he was not a party to the contract.
On appeal, the Court affirmed the order denying Harris' motion for a stay, reasoning that he was not a party to the contract in his individual capacity. Instead, he signed the contract as President of LHC. Accordingly, the Court affirmed the lower court ruling based on the rule that arbitration clauses are binding only on parties to the contract.
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