ADM 3360 Chapter 16: Ch. 16 – The Corporate Form- Operational Matters

• School: University of Ottawa
• Department: Administration
• Course: ADM 3360
• Professor: Gilles Le Vasseur

Document Summary

Primary liability in law, the entity has committed a tort. Identification theory: a theory specifying that a corporation is liable when the person committing the wrong is the corporation"s directing mind. Vicarious liability when an agent or employee who is not a directing mind of the corporation has committed the tort: liability in contract. Use of agency law to determine whether the corporation is liable on a contract or not. The corporation will only be bound if the agent is acting within his actual or apparent authority. Pre-incorporation contract: occur when contracts have been entered into by the company"s promoters on behalf of the corporation before it is created. Risk management: avoid pre-incorporation contract, and create a shelf company instead: criminal and regulatory liability. Use of the identification theory to determine if the crime was committed by a directing mind who acted in the course of his duties and did so mostly for the benefit of the corporation.