After a new corporation adopts a contract that was signed by the promoter before the corporation was actually formed,the corporation is liable on the contract and the promoter no longer has any liability on the contract.

Question

Quizplus · Accepted Answer

The promoter remains liable on the contract unless there is a novation, where the third party agrees to release the promoter from liability and hold only the corporation liable.

After a New Corporation Adopts a Contract That Was Signed