Tom is the promoter of a new corporation that has not yet been incorporated.On behalf of the as yet unincorporated business, he enters into a three-year lease agreement for office space and personally signs the lease in his own name.The corporation is liable on the contract, because Tom is its agent.

Question

Quizplus · Accepted Answer

A corporation cannot be liable for contracts made before it is incorporated, as it does not legally exist yet. Tom, as the promoter, is personally liable unless the corporation adopts the contract after incorporation.

Tom Is the Promoter of a New Corporation That Has