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

State article 22 of international law, State Article 22 of international la...

State Article 22 of international law Article 22 declares the premises of the mission as inviolable and agents of receiving State are not to enter them without the consent of

What is the appropriate revenue recognition, Moto Knappy is a manufacturer ...

Moto Knappy is a manufacturer of automobile motors. The manufacturing process takes a couple of months. The company produces several standard and custom models. To simplify this

Determine in detail about the money market, Determine in detail about the m...

Determine in detail about the money market Prior to the change in monetary policy both countries are assumed to be in equilibrium at point A in both of these diagrams. Only at

Capacity - sales of goods, Capacity - Sales of goods Through S.4 (1) p...

Capacity - Sales of goods Through S.4 (1) provides such capacity to buy and to sell is governed through the natural law concerning capacity for contract. Although where necess

The final stage of the policy making process, QUESTION 1 Give an accoun...

QUESTION 1 Give an account of the distinct methods according to which information can be collected for policy analysis QUESTION 2 "Policy Evaluation marks the final sta

Experience law, Experience Law This is a law of marketing beginning tha...

Experience Law This is a law of marketing beginning that the unit cost of value added to a standard goods, calculated in constant currency, declines by a constant percentage ea

Explain the mode of acquisition - occupation, Explain the mode of acquisiti...

Explain the mode of acquisition - occupation The mode of acquisition is occupation. It is a means by which a State can acquire territory which belongs to no other entity. The o

What are the functions of the independent commission, Question 1: The B...

Question 1: The Bill of Lading possesses the key features of an efficient transport document. Discuss. Question 2: A CIF sale is not a sale of goods but a Sale of Do

Beneficial service - binding contracts, Beneficial Service - Binding Contra...

Beneficial Service - Binding Contracts According to such, a contract relates service or apprenticeship is such binding on an infant - which mostly provided it is substantially

What is multiparty system and coalition, Multiparty system and coalition ...

Multiparty system and coalition We have already made conceptual excursion gaining impressions of the existence of multiple parties. Now, in this section we shall observe that h

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