When a Promoter Enters into a Contract on Behalf of a Corporation

question 60

Multiple Choice

When a promoter enters into a contract on behalf of a corporation that is not yet formed,the corporation will become liable on the contract:

• A) at the time the promoter enters into the contract.
• B) when the corporation comes into existence.
• C) once the corporation has elected its initial board of directors.
• D) only if the corporation, once formed, agrees to be liable on the contract.
• E) only in the case of a novation.

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Definitions:

Environmental Uncertainty

Refers to unpredictable changes and complexities in an organization's external environment that can affect its operations and decision-making processes.

External Environment

All external factors and forces that can affect an organization's performance, including economic, social, political, and technological aspects.

Competitive Advantage

The attributes or conditions that allow an organization to outperform its competitors.

Cost Efficiency

The effectiveness of an organization's ability to produce output at the lowest possible cost while maintaining quality.