Names Are Important

Courtesy of Charleston Daily Photo

Palmetto "Roses"

Shakespeare once wrote: “What’s in a name? that which we call a rose; By any other name [is probably a limited purpose LLC with no assets].” OK, the bracketed language is mine, but in the context of construction contracts, listen to me, not Mr. Shakespeare.

One of the most important things you can do when reviewing a construction contract is to check the name of the entity with whom you are dealing. All too often, names are either misspelled or are missing the entity designation (Inc., LLC, LLP, etc.). Getting the name wrong creates an argument over who the parties to the contract actually were.  And arguments cost money. For example, if the “Inc.” is missing, the other party may argue that you contracted with a d/b/a or partnership. So, instead of advancing your case, you end up rummaging through checks, letters, faxes, emails, or other documents looking for proof that you actually dealt with the “Inc.” 

Also keep in mind that many entities are formed for a single project or, in some cases, a phase of a project. The roman-numeraled-LLC has traditionally been a risk management tool used by owners, but contractors and subcontractors are following suit. 

Finally, potential lien claimants would be wise to confirm that the “Owner” named in the owner-contractor contract actually owns the property. If the entities are different, a subrogated claim of lien on real property will be of very limited utility.

Names are important.

Photo courtesy of Charleston Daily Photo

About Gregory L. Shelton

Gregory L. Shelton is licensed to practice in North Carolina, South Carolina, and Florida. He is a South Carolina circuit court mediator and North Carolina superior court mediator. Greg is the Managing Editor of the North Carolina Construction Law Deskbook, the definitive treatise on construction law in the state. He is also Florida board certified as a construction law specialist. He practices at Horack, Talley, Pharr & Lowndes, P.A. Phone: (704) 377-2500 Fax: (704) 716-0905 Email: GShelton@horacktalley.com.
Government Contracts, NC Law, SC Law , , , , ,

Leave a Reply