BLAW 308 Lecture Notes - Lecture 11: Novation, Stock Certificate, Fiduciary
Document Summary
Promoter : incorporates a business, organizes its initial management, and raises its initial capital(for a corporation) If the promoter signs a contract prior to the incorporation means the promoters are jointly and severally liable (prior to incorporation bc corp does not exist) Only way prior contracts made by the promoter to be bound are through the corporation"s adoption of those contracts. You become a corporation by filing your certificate of incorporation. Promoter signs a contract, but then the inc came into existence. Smith sued them for breach of contract, but gyro counters by saying they arent a plaintiff. A corporation is generally not bound by prior contracts but they can acquire the rights and subject itself to duties with respect to pre incorporation matters. Yachts inc ratified by suing on behalf, therefore through implied novation they do have the right to the contract.
