Does a director who contracted for a not yet incorporated company have to pay for goods that did not exist?
Alberta, Canada
The following excerpt is from MacRae v. Broder, 1998 ABQB 1007 (CanLII):
The Court of Appeal distinguished Kelner v. Baxter (1866) L.R. 2 C.P. 174. There, directors who had contracted for a not yet incorporated company and taken the benefit of the goods were held liable to pay for the goods on the basis they had contracted on behalf of a principal that did not exist and were personally liable.
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