agency and corp

Question 1

agency and corp

Answer 1

Corp and agency/K(liability)

Corps assign promoter’s(agent) the right to enter in k’s on their behalf (whether disclosed or not). Promoter is solely liable unless there is a (novation). Corp becomes liable if (ratified)
.

• Generally, a promoter is a person who procures commitments for capital and instrumentalities on behalf of a corp to be formed. Promoter become personally liable on k’s they enter into on behalf of the corp to be formed. The promoters liability continues even after the corp is formed and even if the corp also becomes liable on the K after adopting it.

Exception: a promoter is not personally liable on a K if the agreement between the parties expressly indicate that the promoter is not to be bound. (Novation)

Next, under agency law, typically a signature that states the person is signing on a person’s behalf would release that person from liability; however, one can not be an agent for a corp since under agency law, a person can not be an agent of. A non existent corp.

Corp becoming liable to a promoters k
Generally, a corp is not liable on a K entered into by a promoter.

Exception, ratified, a corp can become liable on promoter’s k if it adopts, expressly or impliedly.