The case of Gregor Fisken Limited -v- Bernard Carl [2021] EWCA Civ 792 concerned a contract for the sale of a classic Ferrari, in the sum of $44m. The buyer entered into a contract to purchase the vehicle from the seller, with the contract heading referring to the buyer as an agent for an undisclosed principal.
At the time the parties entered into the contract, the gearbox was no longer within the car. The buyer wished to obtain the original gearbox for the vehicle, with the contract making specific provisions for the seller to use their best endeavours to recover the gearbox and then duly provide to the buyer. If the seller was successful in doing so, he would be entitled to an additional payment from the buyer of $500,000. The purchase of the vehicle proceeded, and the location of the gearbox was found. However, a dispute arose on a variety of issues which included the gearbox, as well as focusing on the identity of the contracting parties.
The contract contained reference to the buyer being an “agent for an undisclosed principal”. In evidence submitted by the parties, it subsequently emerged that the buyer had given an inaccurate picture that the intended buyer was someone other than the buyer himself. The buyer did not want the seller to know that he was purchasing the vehicle himself to then resell at a profit. To conceal this, the buyer referred to him being an agent for an undisclosed principal. However, when signing the contract, the buyer signed simply with his name, with no reference or indication that he was signing in the capacity as an agent.
When having regard to the evidence submitted to the Court, it was concluded that the buyer himself was the contracting party. The mere fact the contract referred to the buyer being an agent, did not remove that individual from their personal responsibility when entering into the contract without reference to the capacity in which they were signing.
This case serves a very important reminder for all parties to be clear on the identification of those entering into a contract and the capacity in which people are signing. Are the individuals signing as themselves in their personal capacity, or are they signing in their capacity as a director of a Limited company, or perhaps as an agent for their principal, by way of example?
If you sign a contract as yourself without it being made expressly clear in the contract that you are in fact signing as an authorised signatory, you are at risk that you personally will be held to be the contracting party.
If you have any concerns or queries relating to this matter, please contact Gemma Newing or a member of our Rooks Rider Solicitors’ Dispute Resolution team for advice and assistance.
