A Promoter Can Escape Personal Liability on a Preformation Contract

question 2

True/False

A promoter can escape personal liability on a preformation contract by having the corporation and the third party execute an adoption.

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Definitions:

Legal Right

A privilege or entitlement under the law that allows an individual or entity to perform or refrain from performing certain actions.

Ownership

The state or fact of having legal control and rights over property, which could be tangible or intangible.

Recourse

The right to seek compensation or legal remedy in a situation where one has been wronged or harmed.

Utmost Good Faith

A principle requiring parties in certain types of contracts, such as insurance, to act honestly and not mislead or withhold critical information from one another.