How to Identify the Parties in a Contract

Every contract must name the parties to the contract and you can’t afford to get this part wrong. Here’s how to do it right.

Why This Matters

The party named in a contract is the one responsible for fulfilling its obligations. If something goes wrong, the named party is the one held liable:

• If an individual is named, they are personally liable.
• If a business is named, the business is liable, while its owners are usually protected (with some exceptions).

This is easy to get right, but also easy to mess up. Here’s how to ensure you do it correctly.

(Related: Learn how to properly sign a contract in this post.)

How to Name an Individual

For individuals, use their full legal name in the preamble (the opening paragraph of the contract). It’s best to use the formal version of their name (e.g., “Christopher” instead of “Chris”), though this isn’t always legally required.

How to Name a Business Entity

Naming a business entity requires more care. Here’s what you need to do:

• Use the business’s full legal name, including its entity type (e.g., LLC, Inc.).
• Identify the state of incorporation, since multiple businesses can have the same name in different states.

To verify this information, check the Secretary of State’s database where the business is likely incorporated (usually its home state or Delaware). Once confirmed, use the company’s full legal name in the preamble and format the signature block correctly.

How to Sign the Contract

After naming the parties correctly, you must ensure the signatures are formatted correctly. Read this post to see examples of how to do that right.

What About DBAs (Fictitious Names)?

A DBA (“Doing Business As”) is a nickname, not a legal entity. While a contract can technically bind someone under a DBA, it’s best to avoid that.

• Individuals and businesses can operate under a DBA, but in a contract, always use the proper legal name.
• If necessary, you can reference a DBA in the preamble, such as “NewCo, LLC (d/b/a Acme Technology)”.
• In the signature block, use the legal name, not the DBA.

What Name to Use Throughout the Contract

Most contracts will not refer to the parties’ full legal name throughout the contract. Rather, they use a short version. For example, Doe Designs, LLC could be defined as “Doe Designs” or even “Doe”. Or sometimes the party will be defined in terms of their role, such as “Contractor” or “Client”. Here is a common way to begin an agreement:

Example: “This Client Agreement is effective the date the last party signs it and is between Doe Designs, LLC, a Colorado limited liability company (the “Designer”) and BigCorp, Inc., a Delaware corporation (the “Client”).

In that example, you can then refer to the parties as “the Designer” and “the Client” throughout the agreement.

Example: “The Designer shall deliver the final deliverables to the Client no later than October 1, 2025.”

Final Thoughts

Ensuring you properly name the contracting party prevents disputes and protects against unintended liability. Whether you’re drafting contracts in Kansas City, Boulder, or beyond, taking the time to get this right can save significant legal headaches down the road.

*This article is general in nature and is not legal advice.