pre-incorporation contract

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A contract purportedly entered into by a person on behalf of a company at a time when the company has not been formed. Under section 51 of the Companies Act 2006, subject to any agreement to the contrary, the person purporting to act for the company, or as an agent of the company, is personally liable on the contract (Phonogram Ltd v Lane [1982] QB 939). Such a person can also enforce a pre-incorporation contract (Braymist Ltd v Wise Finance Co Ltd [2002] EWCA Civ 127, [2002] 3 WLR 322).

Subjects: Law.

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