If a corporation assumes a contract made by a promoter with knowledge that the promoter had fraudulently induced the other party to enter into the contract, the corporation is liable to such other party for the fraud of the promoter.

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When a corporation assumes a contract made by a promoter with knowledge that the promoter had fraudulently induced the other party to enter into the contract, the corporation is considered to have adopted the fraud of the promoter and therefore is liable for it. This is known as the doctrine of adoption, where a corporation becomes responsible for the actions of its agents, including promoters.

If a Corporation Assumes a Contract Made by a Promoter