Is forgiving to put the ‘tld’ in the name of the company important?

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Is forgiving to put the ‘tld’ in the name of the company important?

One of my employee signed a contract without including the ‘ltd’ in the company
name. The other company signed the contract without noticing and me neither.
After a few months, this last company want the cancellation of the contract and
to be fully paid back. Can my employee be personally liable? How can I protect
him?

Asked on November 15, 2017 under Business Law, Alaska

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

Failing to put LTD in the company name does NOT entitle the other party to cancellation of the contract and also does NOT make your employer personally liable so long as, even without the LTD, it is clear that he/she signd for the company and not in his/her personal capacity (e.g. signed it as "John/Jane Doe for Acme Widgets," even if he/she forget to include the "LTD"). The law applies common sense in interpreting and enforcing contracts, and does not invalidate them or come to clearly unintended results based on "typos": as long as it is clear from the contract, from any negotiations and corresondence about the contract, and from the signature page that the other side contracted with your company and not with the employer personally, the contract is between the two companies and is enforceable.
Your employee could be in trouble if she/he put the contract in her/his name and signed only with her/his name: in that case, he/she contracted personally, not as a representative of the company, and could be personally liable on it.


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