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:
- General Trading of 1 The Street, Townton;
- Mr John Doe; and
- 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.