A promoter's liability on preincorporation contracts terminates when a novation is signed.

Name: A promoter's liability on preincorporation contracts terminates when a novation is signed.
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Quizplus · Accepted Answer

A novation is a new agreement that replaces an existing contract, and it releases the original parties from their obligations. Therefore, when a novation is signed, the liability on preincorporation contracts will no longer be on the promoter, but on the new parties to the novation.

A Promoter's Liability on Preincorporation Contracts Terminates When a Novation