It’s not hard. But it’s easy to mess up.
One of the most basic tasks when drafting or signing a contract is properly identifying the parties. If you screw it up, bad things can happen.
Long story short, the party to a contract is the one that has to perform the obligations in the contract and is the one responsible for all warranties in the contract.
So if the CEO of a company accidentally signs as an individual and the company breaches the contract, the CEO might be held personally liable! Conversely, if you screw up the other party’s legal name and they breach the contract, you’ll have to work extra hard (ie, spend more money on legal fees) to hold them to the contract.
Don’t do that.
Here’s what to do:
- First, identify the parties in the preamble (the first paragraph of the contract).
- Second, sign it using the right format.
1. Party Identification
For individuals, this is easy. Print your legal name. Don’t use nicknames, abbreviated names, etc. Use your legal name. For example:
If the contract is incredibly important, or if there is any likely confusion about who you are, you can add more detail. You can include a designation that you are an individual (and not a company), your middle name, your state of residence, and/or your address. For example:
Evan Williams, an individual residing in California
For companies, it is a bit harder (but still easy). First, print your company’s full legal name on file with the Secretary of State. That should be followed by (a) the state in which your company is incorporated (not where it is headquartered, but the state in which it is incorporated); and (b) your entity designation (like “limited liability company” or “corporation”). For example, for Medium, you’d use the following:
A Medium Corporation, a Delaware corporation
Putting ‘em together.
So if Evan were signing an employment agreement with Medium, the full sentence in the contract’s preamble would look something like this:
This Employment Agreement is between Evan Williams, an individual residing in California, and A Medium Corporation, a Delaware corporation (doing business as Medium).
What about DBAs you ask?
You don’t really have to include your DBA, but you can. In the case of Medium, it would look like this:
A Medium Corporation, a Delaware corporation (doing business as Medium)
2. Signing a Contract
For individuals, just sign and print your name. But again, print your legal name, not a nickname or abbreviation.
For companies, follow this format or something like it. The key is to name the company, the person signing on the company’s behalf, and that person’s title.
A Medium Corporation:
Print: Evan Williams
*Because I’m a lawyer, I must say this: This article is very general in nature and does not constitute legal advice. If you have legal questions you should speak with an attorney.