If Callie Sues Min-Ji,Marcus,and Penelope for Unpaid Amounts Without a Novation

question 8

Multiple Choice

If Callie sues Min-ji,Marcus,and Penelope for unpaid amounts without a novation in place,what would be the most likely result?

• A)Min-ji,Marcus,and Penelope will win so long as they can prove that Callie knew that the feed was purchased for a new corporation and not for their personal farm use.
• B)Callie would likely win unless it can be established that the new corporation is making a profit and is able to pay her.
• C)Callie would likely win because courts generally hold promoters liable and rule that preincorporation contracts do not bind the new corporation.
• D)Callie would likely win unless it can be established that the new corporation was capitalized with at least $100,000 and is able to pay her.
• E)Min-ji,Marcus,and Penelope will win unless they have already paid partial amounts leading Callie to expect that they,not the corporation,had accepted liability.

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Definitions:

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Employees who are not members of a labor union and do not have their employment terms negotiated collectively.

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The ratio of workers who are union members to the total number of workers in a given region or sector, indicative of the strength and reach of labor unions.

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A body of laws, administrative rulings, and precedents which address the legal rights of, and restrictions on, working people and their organizations.