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

Corp case study - Essay Example t Darden, Doman & Stafford Associates (DDA) accepted the obligation of a corporation not yet formed and did not hold John Goodman as a responsible individual, as noted in the dissenting opinion (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 made by him. As such decision 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 agreed 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, Goodman’s arguments that the terms â€Å"in formation† in the contract and â€Å"†¦ warranties contained herein shall be construed to have been made between seller and resultant corporation†¦Ã¢â‚¬  were in fact ambiguous 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 court’s 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 any 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