Who is the contracting party?

Often, it can be difficult to identify contracting parties.  For example, when negotiating with a developer that is a holding company but uses special purpose vehicles for each individual development. 

Alternatively, there may be different trading companies in a group and it may not be clear which trading company you are working with.  Things may become even more difficult if there are dormant companies in the group. 

The importance of knowing who you are contracting with was shown in the recent case of Liberty Mercian Limited v Cuddy Civil Engineering Limited.  In this case, the contract had the wrong name in it. 

This meant when a problem arose there was an extra step for the claimant to overcome to take action.  The High Court declined to correct the error in the name of the contracting party.  This meant that the claimant had to sue a dormant company with no assets.

When entering into a contract you should make sure that the correct name of the other party is used.  It should be clarified whether the contracting party is a limited company or some other entity.  If it is not clear this may cause problems in the future.

For more information, please contact Peter Allen on 01245 453813.