Author: Jason Williams
Published: June 10, 2013
Reading time: 2 minutes
This article is 8 years old.
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Question: Mr Lee signs a letter, and under his signature are the words ‘Mountain Problems’.
‘Mountain Problems’ is actually the trading name of ‘Ishe Making This Up Ltd’ and Mr Lee is the sole shareholder and director thereof.
Your business acts on this letter, which is an agreement to repair a car for £500.
Ishe Making This Up Ltd goes into liquidation and you are told you won’t be getting paid for the repair for this reason. We’ve had this one before!
For those of you that think the contract is between your business and Mr Lee in a personal capacity lift your right hand now.
For those who think the contract was between your business and the Ltd Company, lift your left hand now.
With the spare hand, scroll down for the answer.
Answer: The names may be fictitious but the Court of Appeal has recently held that the contract would be with the named individual in a personal capacity. This was due to the absence in that letter of any connection between the trading name and the Ltd Company name.
You can all put your hands down now. Those withdrawing their right arm can look smug but the question is this – just how many of you are heading for the stationery cupboard right now?