Kent Incorporated Provincially

question 84

Multiple Choice

Kent incorporated provincially. The corporation worked with small businesses in developing graphs and charts from their data for presentation to bankers, partners, shareholders, etc. If Kent, as promoter and agent of the company, had bought the necessary equipment from Ace Computers Ltd. prior to incorporation, which of the following would be true?

• A) At common law, pre-incorporation contracts are binding on the corporation, but only from the moment the corporation comes into existence.
• B) Many jurisdictions have recently enacted statutory provisions preventing a corporation from ratifying pre-incorporation contracts.
• C) Kent may have been able to protect himself by including a provision in the contract with Ace exempting him from personal liability.
• D) A corporation is legally bound to ratify all contracts made prior to incorporation, but only if those contracts were made with the intention that the corporation be bound.
• E) Kent's liability on the contract would be limited to his investment in the corporation.

---

Definitions:

Mutual Consent

An agreement between parties where all individuals involved have a clear understanding and agree on the same terms and conditions.

Emancipated

The legal process by which a minor achieves legal independence and is released from the control and responsibility of their parents or guardians.

Employed

The state of being engaged in work or activities for which one receives compensation, typically in the form of salary or wages.

Certain Age

Refers to a specific time of life at which individuals may reach milestones, become eligible for certain rights, or be subject to certain laws.