Pre-incorporation contracts, Business Law and Ethics

Assignment Help:

Pre-incorporation Contracts:

                            A pre-incorporated contract is an agreement which is entered into, usually by a promoter or promoters, on behalf of a company at a time when the company's formation has not been completed by its registration. A few cases have been contested in English courts regarding the effect of such agreements. The following rules were enunciated by the judges in the course of deciding the said cases:

          (a)     If the agreement is a written one and it is apparent from the words used therein that the promoters were contracting as individuals, they will be held personally liable under the contract. This will be so because no oral testimony will be admissible in evidence to rebut the contents of the written document: Kelner v Baxter (23).

In other words, they will not be allowed to say that they were contracting for the company. Regarding the case of Kelner v Baxter it should be noted that,  according to the written document that the parties signed, the offer was made to, and was accepted by, the promoters personally. They were therefore made personally liable on the contract. This was clarified by Lord Goddard in the later case of Newborne v Sensolid Ltd (24) when he said that, in Kelner v Baxter, "the contract showed that it (i.e. the wine)  was agreed to be sold to certain men who were the proposed directors of a company which was coming into existence. They agreed to buy".


Related Discussions:- Pre-incorporation contracts

Illustrate the doctrine of judicial precedent, Illustrate the doctrine of j...

Illustrate the doctrine of judicial precedent? The doctrine of judicial precedent It states that higher court decision are binding on lower courts and like a result it i

Tort law assignment help: causation, The second factor which is necessary f...

The second factor which is necessary for a claimant to impose claim on other person is to have a cause for the action taken by him. Hence it is important to have a proper link betw

Delivery of good – sales of goods, Delivery of Good – Sales of Goods T...

Delivery of Good – Sales of Goods Therefore this is the voluntary transfer of possession from one person to other. Actually delivery usually takes any of the next forms, namel

Explain self determination, Explain Self determination Self determinat...

Explain Self determination Self determination is actually the foundation of United Nations (UN) Charter. It is defined as a right of people to determine and to choose their ow

I need essay writing help, I am looking for essay writing help in topic "Ec...

I am looking for essay writing help in topic "Economic Crisis in Europe"

Explain clause compromis and clause compromissoire, Question 1: Define,...

Question 1: Define, distinguish and discuss the limits of each of the following mechanism of Alternative Dispute Resolution, namely; (a) Conciliation; and (b) Negotiation.

Determine about the opportunistic policy cycle, Determine about the Opportu...

Determine about the Opportunistic policy cycle We now turn back once again to study the behaviour of the decision maker who, ultimately wants to return to the office in future.

Valid but irregular allotments -allotment of shares , Valid But Irregular A...

Valid But Irregular Allotments: An allotment of shares is valid but irregular under S.52 (3) if it was made before the time of the opening of the subscription lists. The secti

Leases - voidable contracts, Leases - Voidable Contracts However a lea...

Leases - Voidable Contracts However a lease granted to an infant is binding on him unless he repudiates it then within a reasonable time after attaining the age for eighteen.

What is meant by the supremacy of parliament, Question: (a) Define dem...

Question: (a) Define democracy. How far is the famous saying of former president of USA, Abraham Lincoln valid today? (b) Argue the case for and against the introduction

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd