What's in a name?

Shakespeare famously asserted: “That which we call a rose by any other name would smell as sweet”, but in contract law establishing the identity of the parties is essential – otherwise the contract may be void for uncertainty. If an incorrect name hasbeen used in a contract, the courts can correct the mistake in somecircumstances.

In Derek Hodd Ltd vClimate Change Capital Limited [2013] EWHC 1665,a letter of engagement prepared by a consultant had incorrectly used the name of a dormant company asthe client.  The consultant claimed against Climate Change Capital Ltd (CCC) for payment of fees, arguing that theclient named in the letter was a '‘misnomer’' and should be read as CCC.

The High Court held that CCC should be treated as the clientand was liable for the fees.  Where aparty has been named incorrectly this will not be fatal to the enforceabilityof the contract, provided that there is sufficient evidence to establish whomthe parties intended to be named.

Courts can employ a variety of approaches to correct mistakes,including the principle of “construction” and the “rectification” of contracts. Whether a remedy is available willdepend in each case upon the nature of the document, and the nature of themistake – for example, whether the error is a mere typographical error or amore fundamental mistake about what was being agreed and with whom.

In DerekHodd, although the mistake went beyond a mere typographical error, thejudge felt it was sufficiently clear from the background facts that the partieshad intended the contracting party to be CCC.  Having reached this conclusion, the judge waswilling to correct the error as a matter of construction.

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