Also known as: severally-liable · several liability
Written by attorneys · grounded in primary & secondary sources — see below
Liability imposed on each of multiple parties such that each answers only for the share of the obligation or harm attributable to that party.
Sydney Santos and two other owners of a machine shop told a supplier that Simone Sanders was a partner. Simone stood at the booth and negotiated terms without correcting the statement. The supplier relied on the representation and placed a large order that the shop later defaulted on. Because fewer than all partners consented to the representation, Sydney and Simone are jointly and severally liable for the supplier's loss.
Sean Steele signed a five-year equipment lease in the name of a corporation he planned to form. He knew the articles had not yet been filed. After the corporation was later formed, the lessor sought payment for the first six months. Sean is jointly and severally liable for the full rental obligation incurred before incorporation.
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A warehouse commingled fungible goods belonging to multiple owners. When the mass proved insufficient due to overissue, one owner sued the warehouse for its proportionate share of the loss. The warehouse is severally liable to that owner for the share attributable to the owner's receipts.
Sophia Singh purchased a vehicle whose seatbelt sleeve was defectively designed. In an accident the sleeve failed and Sophia suffered serious injuries. She sued the manufacturer and the seatbelt supplier. The manufacturer is severally liable for the full amount of Sophia's damages.
Stephen Shaw and the other directors of a corporation approved an employment agreement that paid an executive far more than the services were worth. A shareholder sued the directors for waste. Because the directors approved the agreement, they are severally liable for the corporation's loss.
Starlight Media's product caused injury to a consumer who was also negligent in using it. The jury found the company sixty percent at fault and the consumer forty percent at fault. The company is severally liable only for the portion of damages corresponding to its percentage of fault.
Several liability governs when independent actors cause distinct harms that can be divided by cause. Each party answers only for the portion of loss it produced. Joint and several liability applies only when the harm is indivisible.
A person who consents to being represented as a partner is severally liable to a third party who relies on the representation and enters a transaction. Liability is limited to the consenting partners and the purported partner when fewer than all partners consent.
A person who signs a contract knowing the corporation has not yet been formed is severally liable for all liabilities created while acting on behalf of the nonexistent entity. Post-formation conduct does not retroactively eliminate that personal liability.
…because they approved the wasteful agreement; if plaintiff prevails on the merits all the directors will be jointly and severally liable; therefore, the directors’ interest in avoiding personal liability automatically and absolutely disqualifies them from passing on a shareholder’s demand. Such allegations are conclusory at…