Identifying the parties to a contract

The first thing I learnt as a trainee lawyer is that the parties to a contract should be properly and unambiguously identified.  I spent the next few years learning that non-lawyers routinely elide this principle - to the benefit of no-one, except lawyers.

Consider the following contractual parties clause.

This agreement is made on XXX between:

  1. General Trading of 1 The Street, Townton;
  2. Mr John Doe; and
  3. Commercial Services Ltd.

This is wrong.  Horribly wrong.  Nonetheless, commercial lawyers and – especially - litigators see this sort of thing in contracts all the time.

In case you can't spot all the problems with this, I've listed them.

General Trading of 1 The Street, Townton

What is General Trading?  If I visit 1 The Street, Townton, will I be able to see it, touch it, serve proceedings on it?   It could be the trading name of a sole trader, or perhaps a partnership, or perhaps a company.  It could be the name of a company, omitting the Limited or Ltd.  We just don't know.

Mr John Doe

There are a lot of John Does in the world.  Which John Doe is this?  Is it John A. Doe or John B. Doe?  Does he have an address, perhaps, where we could reach him?  What about a uniquely identifying code of some kind, a primary key, such as a passport number?

Commercial Services Ltd

This is a little better: E minus rather than complete fail.  We know we have a limited company, and we have its name.  But we don't know in which jurisdiction it is incorporated.  And we don't know its registration number.  Companies can change names, but they can't change registration numbers.

If you don't properly identify the parties to the contract, how will you know who can enforce the contract?  How will you know who it can be enforced against?

So, next time you're thinking of skimping on party information, think again.

For companies and LLPs, identify them using their:

  • full legal name;
  • registered office address;
  • company registration number; and
  • country of incorporation.

For sole traders, identify them using:

  • their trading name;
  • the full name of the individual concerned;
  • the current address of the individual concerned; and
  • (if you want to push the boat out) some unique identifier, such as a national ID number or passport number.

For smaller partnerships, identify them in the same way as you would a sole trader, but with information about each individual partner.  For larger partnerships, you might want to identify one or two representative partners.

Comments

If the contract cover specifies A as one of the contracting parties but in the main body specifies B and B's personal address as a contracting party, is this contract valid or enforceable? Also a contracting party includes two people, do they both need to sign the contract to make it valid? Many thanks.

Regarding your first question, see:

http://www.inhouselawyer.co.uk/index.php/contract/10364-whats-in-a-name-...

Of course, if the contract hasn't been agreed between the parties, the possibility of mistake/recitifcation does not arise. Usually, a contract would be agreed with signatures, but there are other ways.

I think the only way you will get a clear answer to your question would be to instruct a solicitor to advise, who can then consider all the relevant background information.

It is possible to include a variation clause to a contract which comes into effect at the same time as the contract is signed. This has arisen as the terms of the contract are set but a variation clause allows for change once the contract is legally binding and executed.

If the terms of the contract are set, then how can it be varied?

I'm guessing you mean that there is a contractual document which needs to form part of the contract in unamended form, and the question is whether other parts of the contractual documentation can vary that document. If so, I suppose the answer is "yes", although I would usually frame this as one part of the documentation disapplying the provisions of another part of the documentation, rather than a variation. You will need to ensure that the part of the documentation doing the disapplying takes precedence over the part being partially disapplied.

Is an agreement involving three parties in any danger of inviting misinterpretation or confusion with respect to the third party if it carries a clause against encouraging "any third party interest"?

If so, then what is the best remedy?

"Third party" is usually used on contracts to refer to a person other than the contracting parties. For this reason, unless there were some countervailing factor (eg third party being a defined term), I would usually treat a reference to a third party in a three-party contracts as being a reference to a non-contracting party.  I'd need to review the contract to form a firm view.

If you are worried about misinterpretation, I suggest that you agree with the other parties a letter of amendment.

In such a context, and when an agreement is still being drafted, is it perhaps advisable to use such terms as Party One, Party Two and Party Three, for instance, or some other nomenclature, instead of first party, second party and third party?

Yes, using defined terms to identify each party would be a good idea here.

In case you are unfamiliar with the conventions, these are usually set out either in the parties clause near the start of the document or in a special definitions section.  Eg "Party One" means XYZ Ltd, a company incoroporated ...".

Hi all, I would like to enquire about one thing. In the event a contracting party changes its company registered address during the course of a contract period, would there be any contractual impact due to the change? Would it be deemed as an amendment to contract?

Thanks

... usually have any impact on a contract, unless obligations were specifically linked to the registered office in the contract.

It wouldn't usually be thought of as an amendment.

Under "Companies and LLPs" you indicate that the "full legal name" be used along with other qualifying identification factors.  Is it OK to use common abbreviations in the "full legal name" without specific punctuation?  In your example you use "Ltd" which is an abbreviation for "Limited" so abbreviations, per se, must be OK.  However, is there a specific rule that says it must match exactly the way the company's name appears on a state's "Secretary of State" site of registered business names?  If the company's name is displayed as "ABC Company L.L.C." on the SoS site is it allowable to refer to the company without the periods between the "LLC" or must it be shown exactly as "L.L.C."?

... about English law or US law?

If a third party is named in a contract but had no knowledge of the agreement or of the terms and conditions that imposed obligations on that third party would the contract be enforceable? The third party never signed the contract nor was ever approached to sign.

In English law a contracting party needs to either offer to contract or to accept another's offer to contract, in order for a contract to be formed.

There are however situations where the actions of another can bind a person to a contract (eg where the other is an agent acting on behalf of that person).

Whether the contract is enforceable is a separate question. For example, it might be enforceable but between two other people.

There are a lot of unknowns here - you would need to speak to a lawyer to get a proper idea of the legal position.

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