Pre registration contracts

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Written by:

Quincy B


Date added:

April 20, 2017








No of pages / words:

6 / 1496


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2607 times


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He might order stock and sign the contract in the unregistered company's name. Since a company did not exist before registration it could not sign a contract itself or appoint an agent to sign on its behalf. Therefore promoters could not be seen as the company's agent. Circumstances such as this are problematic and raise difficult questions as to the enforceability of the contract and the availability of damages for its breech...
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"This was because under the law of agency , ratification has a retrospective effect and the contract was regarded as being made at the time it was entered into by the agent when the company was not in existence" . A company could only be held liable for a pre-registration contract if it entered into a new contract with the same terms as the pre-registration contract after it was registered...
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