When contracting with group companies, or companies with trading names, do you always check the company’s name? It sounds obvious but inserting the incorrect name into a contract could leave you without redress if things go wrong.
The recent case of Liberty Mercian v Cuddy provides a cautionary tale.
Problems occurred and Liberty attempted to terminate the contract and commence proceedings. As a dormant company, CEL was worthless. Liberty claimed that the naming of CEL in the contract had been a mistake and that their claim should be against CDL.
On the facts, the court was unwilling to find that the naming of CEL had been a mistake and Liberty did not have a contractual claim against CDL.
It is important to understand the legal identity of any party you are contracting with. Groups often have companies with very similar names and even swap those names around from time to time. If in doubt, raise the question during negotiations and carry out your own checks at Companies House. If you remain unsure, please contact us for assistance.