LEGL 226 Chapter Notes - Chapter 33: De Jure, Ultra Vires, Novation
Document Summary
Chapter 33- life and death of a corporation. Promoter"s liability- the promoter is the person who creates the corporation. A promoter is generally liable on any contract signed before the corporation is formed. The corporation is not liable on any contracts signed before incorporation unless it adopts the contract after incorporation: adoption- when a corporation accepts legal responsibility for a contract. Even if the corporation adopts the contract, the promoter is still liable until the 3rd party agrees to a novation: novation- a new contract. If it is clear that the parties did not intend the promoter to be liable, then he is released from liability once the corporation adopts the contract. Defective incorporation the promoter signs on behalf of the anticipation of a new corporation but the corp. never happens. De jure corporation- by law" means that the promoter has substantially complied with the requirements for incorporation but has made some minor error.
