Corp case study Essay Example | Topics and Well Written Essays - 500 words

Corp case study - Essay Examplet Darden, Doman & Stafford Associates (DDA) accepted the obligation of a potbelly stove not yet formed and did not hold John Goodman as a responsible individual, as noted in the dissenting conviction (John A. Goodman 7).When it cannot be concluded by evidence that the parties to the contract other than the promoter, looked solely to the corporation and not to the promoter for performance of the contract, the promoter becomes liable for the preincorporation contract do by him. As such finale was passed against Goodman, making him liable under the preincorporation contract (John A. Goodman 3).As Goodman or the promoter in this case alleged that DDS concord to look solely to the corporation, he will have the burden of proving the agreement. The release of the promoter depends on the intent of the party when the promoter depends on the agreement. However, Goodmans arguments that the name in formation in the contract and warranties contained herein sh all be construed to have been made between seller and resultant corporation were in fact indistinct as they did not expressly state about the release from personal liability of the promoter (John A. Goodman 5-6).While determining whether the trial courts decision was correct based on the evidence, the court found that the trial court gave its decision in favor of Goodman based on three considerations, which are 1) DDS knew the corporation did not exist 2) The fact that Doman was informed by Goodman about the formation of the corporation and 3) progress payments were made to the corporation. However, the above considerations are not dispositive in whatsoever way of the intent of DDS to hold Goodman personally liable. As such the evidence not being substantial to show the intent to release Goodman from his personal liability, he was held a party to the contract (John A. Goodman 6- 7).The decision concurs with the general rule that a promoter is liable for a preincorporation contract made for the