In pre-incorporation contracts, who bears liability?

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Study for the Solicitors Qualifying Examination SQE Stage 1. Prepare with flashcards and multiple choice questions. Every question includes hints and explanations. Ace your test with confidence!

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In pre-incorporation contracts, who bears liability?

Before a company exists, there is no separate legal entity to bind by contract. The person who signs a contract on behalf of the future company does so personally, so they are liable on that contract. After incorporation, the company could become liable only if it adopts or ratifies the contract (often via novation), but that doesn’t automatically transfer liability from the signer. So, on pre-incorporation contracts, the signatory is personally liable.

In pre-incorporation contracts, who bears liability?

Study for the Solicitors Qualifying Examination SQE Stage 1. Prepare with flashcards and multiple choice questions. Every question includes hints and explanations. Ace your test with confidence!

In pre-incorporation contracts, who bears liability?

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