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on Nov 30, 2024

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Frank, acting as a promoter for Garleen Co., a corporation not yet in existence, makes a contract with Towne Supplies. When Garleen Co. is formed, it may:

A) adopt the contract, but Frank would not be released from potential liability on the contract.
B) in all states, ratify the contract, thereby releasing Frank from potential liability.
C) adopt the contract, thereby making it retroactive.
D) ratify all or part of Frank's contract.

Promoter

An individual or company that organizes and provides the initial capital, talent, or other resources to start a venture or event.

Potential Liability

The possibility of being responsible for future legal judgments or obligations due to current actions, circumstances, or contracts.

Contracts

Legal agreements between two or more parties that create mutual obligations enforceable by law.

  • Understand the concept of principal-agent relationships and the conditions under which a principal or agent may be liable for contracts.
  • Explain the liability of agents for contracts entered into on behalf of non-existent or undisclosed principals.
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LJ
Lawrence JacoboDec 03, 2024
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