Legal Question in Business Law in California

In California, it depends on whether they have complied with the fictitious business name statute.

A contract that is otherwise valid is not automatically rendered invalid and unenforceable because the name used doesn't correspond exactly to the registered name. Indeed, as Mr. Roach suggests, a company is free to make up a fictitious name and do business under it, and must register such fictitious name in its headquarters county. However, even a failure to register a fictitious business name doesn't necessarily invalidate contracts made under that name.

Consider the following example. Suppose there is a railroad incorporated as the "Alphatown, Betaburg and Pacific Railroad Corporation." Its agent signs bills of lading (shipping contracts) as "AB&P RR." Will they be enforced? You bet they will!

Unenforceability of contracts due to mis-identification of a party will most often occur where the other party can show that it didn't know who it was dealing with, so there could not have been a "meeting of the minds" between contracting parties over the rights and duties under the contract, or where the failure to give an at least more-or-less correct name was a willful attempt to deceive, and the victim actually was deceived, i.e., there was fraud.

There is a strong tendency of courts to enforce contracts despite errors and omissions, if the identity of the contracting parties can be discerned and the subject matter and terms of the contract can be inferred with reasonable certainty by the contract itself or from external evidence such as the parties' prior and subsequent dealings or even their evidence and testimony as to what the alleged contract was all about.

The attorneys have pointed you in the right direction. Courts do tend to enforce a contract despite certain mistakes, like not being 100% as filed with the Secretary of State's office. For more advice, consult an attorney in your area.

Kevin B. Murphy, B.S., M.B.A., J.D. - Mr. Franchise

Franchise Attorney