Who’s your contract with???

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Hamid v Frances Bradshaw Partnership [2013] BLR 447 Court of Appeal

Facts

Dr Hamid had a business which he traded personally under the trade name “Hamid Properties”.  He was also a sole director and shareholder of a company called Chad Furniture Store Limited.  Chad traded as “Moon Furniture”.  Dr Hamid negotiated with Frances Bradshaw Partnership (“FBP”) who were consulting engineers to carry out design work on the site of a proposed new furniture store in Rochdale.

Eventually Dr Hamid sent a letter under the name Moon Furniture and signed by Dr Hamid.

FBP tried to sue Chad Furniture Store Limited for fees in due course and Chad defended saying that it was Dr Hamid trading as Moon Furniture who was actually liable.  Hamid claimed damages against FBP for negligence.

Held:

FBP contracted personally with Hamid despite his use of Chad’s trade name.

Comment

  1. Even the Court of Appeal struggled with this one.  “Moon Furniture” was Chad’s trade name, so when Hamid wrote under that name, it would have made sense to conclude that he is acting as the Director of Chad.  The Court of Appeal decided on the facts, however, that Hamid was using the company’s trade name on his own behalf, not least because he also entered personally into the related construction contract.
  2. This was part of a complex series of cases.  Dr Hamid was also suing FBP and others for breach of contract.  Hamid suffered the loss, so FBP was trying to prove that he was not their client,  and could not sue them.
  3. In very many cases, negotiating parties are confused by trade names particularly where individuals have both incorporated and un-incorporated businesses.  Establishing the identity of the other contracting party, and if possible getting the registered number of any limited company is absolutely vital to risk management.

For further information, help or advice please contact Rob Langley on 0191 211 7975.