A corporation is ______ on a contract made by its ______ for its benefit unless the corporation accepts the contract's benefits.

Question

Quizplus · Accepted Answer

A corporation is not liable on a contract made by its promoters for its benefit unless the corporation accepts the contract's benefits. Promoters are individuals who take the necessary steps to launch a corporation, such as preparing and filing documents with the state. However, until a corporation has been properly formed and authorized to conduct business, it cannot enter into contracts. Therefore, if promoters enter into a contract on behalf of a corporation before it has been properly formed, the corporation cannot be held liable for the contract unless the corporation later accepts the benefits of the contract.

A Corporation Is ______ on a Contract Made by Its