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What’s in a name?

Liberty Mercian Ltd v Cuddy Civil Engineering Ltd and Another [2013]

In 2013, the High Court refused to change a mistake in a contract which named the incorrect contracting party.

Case: Liberty Mercian (“the Claimant”) are developers and entered into a contract for the construction of a new retail plateau for a future Sainsbury’s. A successful tender for the works named the contractor as “the Cuddy Group”. The Claimant’s solicitor carried out various internet searches to confirm the company trading under “the Cuddy Group”. They found Cuddy Civils Engineering Ltd (“CCEL”) and, despite the company being dormant, assumed this to be the correct party and wrote to “the Cuddy Group” asking for all references to be changed to CCEL.

At trial it was common ground that “the Cuddy Group” was a trading name of Cuddy Demolition and Dismantling Limited (“CGDL”). CDDL and CCEL had the same shareholders and common directors. CDDL undertook the work on the site and payments were made into CDDL’s bank account.

A number of problems arose and the Claimant commenced proceedings against CCEL. The Claimant subsequently said they made a mistake when identifying CCEL as the contracting party and it should have been CDDL. The Claimant wanted the court to rectify the contract so that CDDL were the contractor and not CCEL.

Decision: The court found there was no misnomer and no mistake, either mutual or unilateral, the Claimant failed to show that the parties had intended the contractor to be CDDL and that naming CCEL was a mistake. The Claimant’s solicitor carried out the searches on “the Cuddy Group” and asked for all references in the contractual documentation to be under the name of CCEL.

This case provides a clear warning that the courts will only allow a mistake to be changed where there is a clear mistake in the document. When setting up a contract, always ensure that you are confident on the name of all of the parties; the courts do not tend to take a very sympathetic approach. Check with the contracting parties for the most appropriate company, do not simply make assumptions. We strongly advise backing this up with properly checked company numbers where possible. 

Another thing to be careful about when setting up a contract is to ensure you have all of the parties intended to be bound by the contract named within it. This problem arose recently when contracting with a builder for construction of a property. One of the parties was not named in the contract but appeared to have been at all of the meetings and to have played an essential role with the design. It would have saved the builder a lot of time and money if that third party had been expressly named in the contract.

 

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These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice. 

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