tutorial 4(question 4)

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* Tutorial 4(question 4) Cepat Cetak Bhd cannot enter into contracts before its incorporation because the company did not exists before its incorporation. At common law, a company is not bound by a contract made before its corporation The promoter cannot legally enforce payment from the company for services render or expenses incurred because at that time the company was not yet in existence and therefore incapable of incurring any contractual liability Such contracts entered into by the company are null and void,and cannot be ratified-Newborne v Sendolid Ltd If a promoter intended to be personally liable on the contract and contracted as a principal,then he may be liable-Kelner Baxter(1866) Thus, Cepat Cetak Bhd was not liable.But Kay Poh to be personally liable and no ratification was possible.

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Page 1: Tutorial 4(Question 4)

* Tutorial 4(question 4)Cepat Cetak Bhd cannot enter into contracts before its

incorporation because the company did not exists before its incorporation.

At common law, a company is not bound by a contract made before its corporation

The promoter cannot legally enforce payment from the company for services render or expenses incurred because at that time the company was not yet in existence and therefore incapable of incurring any contractual liability

Such contracts entered into by the company are null and void,and cannot be ratified-Newborne v Sendolid Ltd

If a promoter intended to be personally liable on the contract and contracted as a principal,then he may be liable-Kelner Baxter(1866)

Thus, Cepat Cetak Bhd was not liable.But Kay Poh to be personally liable and no ratification was possible.