Source: Robin Roth, Senior Contracts Editor
E-Specs: February 21, 2006

One of the most basic requirements for a contract is the proper identity of the contracting parties, yet this is easily and frequently overlooked. It is easy to overlook this when the name of the meeting is entered instead of the name of the group, or an abbreviation or acronym is used instead of the full group name. When you're reviewing a contract you need to check that each party is fully identified using the complete legal name and that the signatory for each party has the authority to sign.

When designating the legal name of the group, refer to the letterhead or business card for the exact spelling. For the hotel name, keep in mind that the name of the hotel ("Happy Days Inn") may not be the name of the actual contracting party. The contracting party could be the management company that operates the hotel as a franchise. Also, hotels frequently change names when the ownership changes. Given these potential complications, it is advisable to add precise wording that specifies the name and address of the actual contracting party [official name of owner or management company], "doing business as [name of hotel]." Include the state where the contracting party is officially registered.

It is important to ensure that each signatory is duly authorized to sign the contract as an authorized decision maker and representative of the organization. If the signatory has the proper authority to sign as a representative of the organization, the contract will remain in force even if that person is no longer employed there. Likewise, if the hotel changes ownership, the new owner usually acquires the assets and liabilities of the former hotel, so the original contract with its original terms will usually remain in force. Be sure to seek legal advice for any questions or challenges regarding change in status of the signatories or the organizations they represent.

(Note: This information is not intended to be "legal advice." A qualified attorney should be consulted to review all contract issues.)