N-Ext Corp.(NEC)was defectively organized.As a result,even a corporation by estoppel could not be formed.As representatives of NEC,Pete (a shareholder manager)and Dave (a nonshareholder manager)made a contract with a vendor for supplying raw materials to NEC.The vendor did not get paid as per the contract.Who is liable in this situation?
A)NEC
B)Dave and NEC
C)Pete,Dave,and the management of NEC
D)Pete and NEC

Question

Quizplus · Accepted Answer

Since NEC was defectively organized and not even a corporation by estoppel had been formed,courts will impose unlimited contractual liability on Pete,Dave,and the management of NEC.