In litigation involving a promoter,one of the parties named in a contract is described as an entity yet to be incorporated.Any statutory protections from contractual liability available to a promoter have been strictly construed by the courts.Accordingly,in these circumstances,the promoter will be bound by personal liability in the eyes of a court finding the absence of which of the following?

Question

Quizplus · Accepted Answer

If there is a specific provision in the contract that expressly relieves the promoter of personal liability, the court may honor it. Otherwise, the promoter will be held personally liable regardless of the existence of a specific advantage of a valuable business opportunity or whether the entity is incorporated. The other options (C and D) may lead to criminal liability, but they do not necessarily address the issue of contractual liability.

In Litigation Involving a Promoter,one of the Parties Named in a Contract