Topic

Promoter & Pre incorporation contract

Abstract Prasidh Raj Singh1

A promoter is person who brings the company into existence and holds a fiduciary relationship
towards the corporation. Almost in all cases it is the promoter who enters into a contract on
behalf of a company before its incorporation, and in plethora of cases court found it very
difficult with those people who appear on the legal horizon in the process of creating a
corporation called as promoter. An important problem arising as a result of this situation is that
of the legal consequences which should result when a promoter deals with a third party on
behalf of a future corporation. Promoter is a person who brings the company into existence but
there are number of legal consequences in relation to promoter and pre incorporation contract.
It is very clear from the point of promoter that he is not the agent of the company nor he is doing
any authorized work but he is entering into a contract with a third party on behalf of non existing
principle. The position of a promoter is very ambiguous and in most of the time it is found that
the corporation refuses to adopt the pre incorporation contract.

KEYWORDS - Promoter, Pre-incorporation Contract, Corporation, Company

1
Prasidh Raj Singh – Student at National Law University, Orissa India, Email: prasidhrajsingh@gmail.com,
Prasidh_raj16@yahoo.co.in, Mobile no. 09583237911

Electronic copy available at: http://ssrn.com/abstract=1938065

 INTRODUCTION

The expression “promoter” has not been defined under the Indian Companies Act, although the
term is used expressly in many sections. Even in English law, no general statutory definition of
“promoter” is available. The term is one broadly used to describe the person who brings the
corporation into existence. It is a business term, not particularly a legal term.

Even in Australian Corporate Law section 9, there is no definition of a promoter and in the whole
of CA the only reference to a promoter relates to a public company that is issuing a prospectus
under section 711.2 Thus, in most cases, there is a complete reliance on the common law definition
established by lord Cockburn in Twycross V. Grant (1877). Where he define a promoter as one who
undertakes to form a company with reference to a given project and who takes the necessary steps
to accomplish that purpose.3

Pre-incorporation contracts are contracts entered into by a company promoter on behalf of the
company being promoted prior to the incorporation of the proposed company. 4 A pre-
incorporation contract is often incomplete in the sense that such a contract will not normally
provide for the effect of the contract where the proposed company fails to incorporate. Even if the
proposed company has been duly incorporated, such a contract may fail to provide for the parties'
rights and obligations where the company chooses not to have (e.g. through ratification) the
contract. It is therefore necessary for the lawto provide rules to fill these gaps.

Lord Justice Lindley in Lidney & Wigpool Iron Ore Ccompany v. Bird5 , described the position of
promoter, “Although not an agent for the company or a trustee for it before its formation, the old
familiar principles of law of agency and of trusteeship have been extended and very properly
extended to meet such cases. It is perfectly well settled that a promoter of a company is accountable
to it for all monies secretly obtained by him from it just as the relationship of the principle and agent
or the trustee and cestui que between him and company when the money was obtained.”6

2
MICHAEL A. ADAMS, ESSENTIAL CORPORATE LAW 15-16 (1st ed.2002)
3
Twycross v Grant ( 1877 ) 2 CPD 469 (CA)
4
M. J. Whincop, "Of Dragons and Horses: Filling Gaps in Pre-incorporation Contracts" (1998) 12
JCL 223-225.
5
Lidney & Wigpool Iron Ore Company v. Bird [1866] 33 Ch. D 85
6
M. J. Whincop, An Economic and Jurisprudential Genealogy of Corporate Law (Ashgate, Aldershot
2001) 59.

Electronic copy available at: http://ssrn.com/abstract=1938065

Before a company commences business, it has to enter into several contracts and incur several initial
expenses. Contracts which are entered into by promoters with parties to acquire some property or
right for and on behalf of a company yet to be formed are called as ‘pre-incorporation contracts’ or
‘preliminary contracts’. The legal status of a pre-incorporation contract is not easy to define. Going
by the definition of the contract, there have to be at least two parties/persons who enter into
contract with each other. So, the general principle goes that no contract is there if one of the parties
to the contract is not in existence at the time of entering into the contract. Hence, the company can’t
enter into a contract before it comes into existence, and it comes into existence only after the
registration. It may be argued that, the pre-incorporation contract is entered into by the promoters
on behalf of the company. But here also, is a tangle. The promoters, while entering into the contract,
act as agents of the company. But when the principal, i.e. the company is itself not in existence, how
can it appoint an agent to act for it? This question challenges the validity of the legal position of
promoter in case of pre incorporation contract and the liability of promoter toward third parties and
company.
 ORIGIN AND DEVELOPMENT OF PRE-INCORPORATION CONTRACTS

Historically, the difficulty of faulty pre- incorporation has been handled by the common law
principle of de facto corporation and corporation by estoppels. The de facto set of guidelines is the
more significant of these two and permits the title-holder of the company to have the safeguard of
limited liability generally provided by a corporation, if the company is a de facto corporation. “De
facto corporation cases usually list three requirements:

I. The existence of a statute permitting incorporation;

II. The existence of a statute permitting business organizers to undertake business in the
corporate name; and

III. A promoter’s good faith belief that the business was incorporated, and the promoter’s
colorable conformity with incorporation requirements”.7

Reform of corporate law statutes, beginning in the late 1960s, clarified and simplified the common
law position on pre-incorporation contracts.8 The Lawrence Committee, reviewing the O.B.CA.,
recommended that a corporation should have the option to adopt pre-incorporation contracts, and
that until the corporation adopts the contract, the promoter should be liable. Section 20 of the
O.B.C.A., enacted in 1970, and reflected these recommendations.

The Dickerson Committee, which drafted the 1975 amendments to the C.B.C.A., improved upon
the 1970 amendments to the O.B.C.A. It noted the "unsatisfactory state of the common law" of pre-
incorporation contracts, and endorsed the recommendation of the Lawrence Committee that the
promoter should be held liable until the corporation adopts the contract, but added that the
promoter should be able to contract for an express waiver of liability, and that a court should have
the power to order that the promoter be relieved of liability. 9 The rationale provided by the
Dickerson Committee for promoter liability prior to adoption by the corporation was that "as a
matter of business reality, the promoter is usually in control of the pre-incorporation and immediate
post-incorporation process and is able to protect himself." 10 The Committee also recommended that
a corporation should be able to validly adopt only written contracts because

7
Pre-incorporation Contracts, Legal Surta Law students’ Knowledge-Base, (Feb. 20, 2011)
http://legalsutra.org/1414/pre-incorporation-contracts/
8
Lawrence Committee, Interim Report of the Select Committee on Company Law, (Toronto : Legislative Assembly
of Ontario, 1967)
9
Poonam Puri, The Promise of certainty in the law of Pre-incorporation Contracts, Canadian Bar Review, Vol. 80,
pp. 1051-1064, 2001
10
ibid
"this seems the only way of ensuring full disclosure of the terms of the contract, which is an
essential protection for the corporation.”11

PERSONAL LIABILITY OF PROMOTERS VIS-À-VIS PRE-INCORPORATION CONTRACTS

The relationship between promoter and the company that he has floated must be deemed to be
fiduciary relationship from the day the work of floating the company starts.12In Phonogram Ltd v
Lane13 , the court decided that although a contract made before a company’s incorporation cannot
bind the company, it is not wholly devoid of legal effect even if all the persons who negotiated the
contract are aware that the company has not yet been incorporated.

In Cotronic (UK) Ltd v Dezonie14, the court said that the contract takes effect as a personal contract
with the persons who purport to contract on behalf of the company. But it is still not clear up to
what extent the promoter is personally liable for the pre-incorporation contract.

It is also necessary to knowthat the promoter stands in a fiduciary position towards the company. In
Erlanger v. NewSombrero Phosphate company15 , it was held that the promoter of a company undoubtedly
stands in a fiduciary position. They have in their hands the creation and molding of the company.
They have the power of defining howand when and in what shape and under whose supervision.

Section 46 of Indian Companies Act, 1956 says contract on behalf of a company may be made as
follows:-

1. A contract which, if made between private persons would by lawbe required to be in writing
signed by the parties to be charged therewith, maybe made on behalf of the company in
writing signed by any person acting under its authority express or implied and may in the
same manner be varied or discharged.
2. A contract which, if made between private persons would by law be valid although made by
parol only and not reduced into writing, may be made by parol on behalf of the company by

11
R.W. Dickerson, J.L. Howard, and L. Getz, Proposals for a New Business Corporations Law for Canada
(Information Canada, 1971) [Dickerson Report].
12
Commissioner of Income Tax v. Bijli Cotton Mills Ltd. [1899] 2 Ch. 392 (p. 428, C.A.).
13
Phonogram Ltd v Lane (1981) 3 All ER 182
14
Cotronic (UK) Ltd v Dezonie, 1991 BCLC 721(CA)
15
Erlanger v. New Sombrero Phosphate company (39 LT 269)
 any person acting under its authority, express or implied, and may in the same manner be
varied or discharged.16

This whole section deals with a contract on behalf of a company, but the section does not talk about
pre-incorporation contracts and who is authorized to enter into a contract on behalf of the
company. It doesn’t even deny that a promoter cannot enter into a pre-incorporation contract. To
remove the difficulties related to pre-incorporation contracts, Government of India passed the
Specific Relief Act, 1963.

In India there is a marked deviation from the principles of the common law under the provision of
section 19(e) of the specific relief act, 1963. 17 Specific performance may be enforced against a
company where its promoters have, before its incorporation, entered into a contract for the purpose
of the company and such contract is warranted by the term of incorporation of the company by
inclusion in the article of association it is however necessary that the company in such a case must
have accepted the contract after its incorporation and communicated such acceptance to the other
party to the contract. Section 15(h) of the same act, which is identically worded, provides for
obtaining of specific performance by a company.18 In view of these two provision the decisions of
the English courts stating that a pre-incorporation contract of a promoter on behalf of the company
is a nullity and cannot be enforced by or against the company, must be considered in the light of
section 15(h) and 19(e) of the Specific Relief Act, 1963. But after the Specific Relief Act, there are
number of cases in which promoters have been personally liable.19

Even in Sri Lanka section 23 of companies Act talk about the pre-incorporation contract and
ratification of pre-incorporation contract within specified period as per section 23.

23. (1) For the purpose of this section and sections 24 and 25 of this Act, the expression “pre-
incorporation contract” means —
(a) A contract purported to have been entered into by a company before its incorporation;

16
Section 47 of the , Indian Companies Act, 1956
17
Section 19(e) of the, Specific Relief Act, 1963
18
ibid
19
A. RAMAIYA, GUIDE TO COMPANY ACT, 689 ( ed. 17th, 2010)
 (b) A contract entered into by a person on behalf of a company before and in contemplation
of its incorporation.20
(2) Notwithstanding anything to the contrary in any law, a pre-incorporation contract may be
ratified within such period as may be specified in the contract or if no such period is
specified, within a reasonable time after the incorporation of such company, in the name of
which or on behalf of which it has been entered into.21
(3) A pre-incorporation contract that is ratified under subsection (2), shall be as valid and
enforceable as if the company had been a party to the contract at the time it was entered
into.
(4) A pre-incorporation contract may be ratified by a company in the same manner as a
contract may be entered into on behalf of a company under section 19.22

Although the section is talk about the pre-incorporation contract but still the situation is very
complicated to understand. No specified time is mention to ratify the pre-incorporation contract
and the phrase used in this section “within a reasonable time after the incorporation of such
company” is very wide phrase and not enough to provide justice towards the promoter who brings
the company into existence.

In Nepal also section 17 of Companies, Act define Pre-incorporation contract: (1) A contract made
prior to the incorporation of a company shall be a proposed contract only, and such contract shall
not be binding on the company.
(2) If, prior to the incorporation of a company, any person carries on any transaction or
borrows money on behalf of the company, such person shall be personally liable for any
contract related with the transaction so carried on, subject to Sub-section (3).

(3) If, within the time mentioned in any transactions or within the reasonable time after the
incorporation of a company, the company, through its act, action or conduct, accepts any

20
Law net Government of Sri Lanka,
http://www.lawnet.lk/sec_process.php?chapterid=2007Y0V0C7A&sectionno=23&title=Companies%20Act&path=7
(last Visited 12.01.2011)
21
ibid
22
ibid
 act, action or conduct, accepts any act, action to borrowing done or made prior to the date
of authorization to commence its transactions or endorses such act or action, that
transaction shall be binding on the company and the other contracting party; and the person
carrying out such act to action shall be released from the personal liability to be borne
pursuant to Sub-section(2).

Section 17(2) of Nepal companies act clearly stated that, any person carries on any transaction or
borrows money on behalf of the company, such person shall be personally liable for any contract
related with the transaction so carried on. Now again if the promoter is enter into a contract for the
benefit of the company he or she is personally liable as per section 17(2), but there are certain
exception is given in section 17(3) but still that exceptions is not going to solve the problem
ultimately it is promoter who suffer the loss in most of the cases. So there is a need to expand the
lawin this area and clear the position of promoter.

The position at common law is instructive to begin by looking at the position of pre-incorporation
arrangements at common law. One of the first things that must be noted is that most of the
standard forms of contract variation do not serve to describe the situation of pre-incorporation
contracts. Agency, subrogation and ratification are apparently because of the non existence of the
principle at the time the contract is made. 23 At common law the position of pre-incorporation
contracts is unsatisfactory. Unless it could be said that the promoter intended to contract personally,
the other contracting party could not sue him under the agreement himself. The company itself of
course, even if subsequently incorporated, could not be liable as it was not in existence at the time of
the agreement.24 The present state of the law is considered in the most common law countries as
“unsatisfactory and replete with serious difficulties for promoters.25

But the interim report of the select committee on company law in Ontario reviewed the position in
1967. The report recommended that “the so-called rule” in Kelner v.Baxter be repealed and that a
Corporation should be entitled to adopt a pre-incorporation contract made on its behalf. Until such

23
Paul J. Omar, Crossing time’s Boundaries: A Comparative View of Legal Response to the pre-incorporation
Contract, Sing J. Legal Stud. 77 (2005).
24
John MCMullen, Preliminary Contracts by Promoters, The Cambridge Law Journal, Vol. 41, No. 1 (apr.,
1982),pp. 47-50
25
Dr. Joseph H. Gross, Liability on Pre-incorporation Contracts; A comparative review, 18 McGill L.J. 513 (1972)
adoption occurred the promoter would remain liable on the contract. The committee’s
recommendations were implemented in section 20 of the ontario Business Corporations Act 1970.26

In India a corporation, after it comes into existence, may ratify a contract made by its promoter
before it is formed. Such a contract after it ratification becomes the contract of the corporation,
which is entitled to the benefits thereof and is liable thereon. Ratification may be express or
implied.27But there are certain condition needs to be fulfill for the validity of pre-incorporation
contract.

1. The company had adopted the same after incorporation.

2. The company coming into the existence must accepted the pre-incorporation contract
3. The company must communicate to the third party who enters into a contract.

If the above condition is not fulfilled then the promoter is personally held liable

Promoters who want to bind the other party to contract must assume personal responsibility under
the contract. They may however, limit their liability. The promoter may obtain an option on the
term that the rights contained in the agreement may be assigned to the future
companies.28Alternatively the promoter may contract as trustees for the proposed company subject
to this condition that on the company entering into new contract on similar terms the promoter
would be released from his liability. Still alternative, the promoter may prepare only a draft
agreement which is to be adopted by the company with an express provision in the objects clause
for such adoption. It may be provided in a pre-incorporation contract that the person making the
contract would be released from liability under it if the company after incorporation, enters into a
second contract with the contractor on the same terms as the pre-incorporation contract. This is
called “Novation”

In the case Seth SobhagMal Lodha vEdward Mills ComapnyLtd29, the high court of Rajasthan followed
the English decision in holding that a contract entered into on behalf of a company before its
incorporation as not binding on the company. Evidently the provision of specific relief Act, were

26
Jacob S. Ziegel, Promoter’s Liability and Preincorporation Contracts: Westcom Radio Group Ltd. V.Maclsaac,
16 Can. Bus. L.J. 324 (1989-1990)
27
R. W. Calloway, pre-incorporation agreement, 11 Sw. L.J. 509 (1957)
28
Supra note. 18, p. 689
29
Seth Sobhag Mal Lodha v Edward Mills Comapny Ltd (1972) 42 Com Cases 1 (Raj)
not brought to the notice of the learned judges. There remains for consideration a class of cases in
which a promoter enters into a contract on behalf of a company to be incorporated and the
company does not ratify the contract.. In such cases, the question will arise as to whether the
promoter is personally liable to the other contracting parties on the footing that he himself is the
party to the contract. Up to what extent the promoter is personally liable inspite of the fact that he is
entering into a contract for the benefit of the company

As a general rule, promoters are personally liable for the contract they make, even though made on
behalf of a corporation to be formed. The imposition of personal liability is based on the principle
that one who acts as an agent for the nonexistent principle (corporation) is himself liable on the
contract in the absence of an agreement to the contrary.30

A promoter’s personal liability under a contract which he makes in the name of a company not yet
formed, does not enable him to sue the other party under the contract but if he renders any services
to the other party under the purported contract, he may sue for those services under a “quantum
meriuit”31The expression quantum meriuit means “the amount he deserve” or “what the job is
worth”. Essentially, quantum meriuit is an action for payment of the reasonable value of service
performed.32 According to Black’s Law Dictionary quantum meruit means a claim or right of action
for the reasonable value of services rendered.33Such claim as recognized by the court of appeal in
Cotronic (UK) Ltd v. Dezonie, where the court added that section 34 of the 1985 act does not have the
effect of preventing such claim.34

30
DAVID MINARS, CORPORATION STEP BY STEPD, 20 ( ed. 2nd , 2003)
31
Supra note. 16, p. 689
32
Allens Arthur Robinson, Quantum Meruit, (Mar. 10, 2011),http://www.aar.com.au/pubs/pdf/const/pap23jun06.pdf
33
Bryan A. Garner, Black’s Law Dictionary, ed. 9th , pg. 1362
34
Supra note. 13, p. 718
 LIABILITY OF PROMOTER BEFORE INCORPORATION OF THE COMPANY IN INDIA

By far the highest percentage of cases holds the promoter personally liable on pre-incorporation
contracts. The cases state as a general rule that the promoter is personally liable on the pre-
incorporation contract, absent explicit language stating otherwise. 35 If a promoter sells property
which has an option to buy, or has purchased, to the corporation; or transacts any other business
with the corporation, after assuming the relationship of promoter, he is under a duty to disclose fully
the material facts of the transaction.36 Although he is not an agent or a trustee he has a fiduciary
relationship analogous to theirs, and a failure to make such a disclosure thus renders him liable to
the corporation for all the profit he may realize from the transaction.37

The promoter is personally bound, if he/she makes the contract in the corporation’s name, and the
third party does not know that the corporation has yet to be formed. This type of case does not
require profound analysis because the promoter has made a material misrepresentation. The
promoter is personally liable when he represented that a corporation exists and entered into a
contract in the corporate name when the promoters knows that no corporation has been formed,
either because no attempt has been made to file article of incorporation or because he has already
received rejected articles of incorporation from the filing agency38 If a company never comes into
existence as an artificial legal person and a contract is entered into by one of the promoter, it seems
clear that on contractual grounds third party file a suit against promoter because there is no
company in existence and hence the promoter is personally liable39

However if the contract is performed prior to incorporation and is not necessary to the formation or
purpose of the corporation, then the subject matter of the contract must be considered, and if such

35
William J. Rands ,high Pressure Sale Tactis and Dead Tree: What to do with Promoter Pre-incorporation
Contracts, Business Law Journal, Vol. 4, p. 1, 2007, U of Cinicinnati Public Law Research Paper N0. 08-17
36
Davis v. Las Ovas Co. (1913) 227 U.S 80
37
Corporation: promoters: Liability of promoter to Corporation for Secret Profit, California Law Review, Vol. 13,
No. 3 (Mar., 1925), pp. 240-245
38
American Bar Association. Committee on Corporate Law, Model Business Corporation act annotated:Model
Business, vol. 1, pg. 56
39
M. H. Ogilvie, Liability of person purpoting to contract as Agent for unformed Company, University of British
Columbia Law Review, Vol. 17, Issue 2 (1983), pp. 321-346
subject matter be personal service then the corporation will probably not be held liable in this case
promoter is personally liable.40

LIABILITY OF PROMOTER AFTER INCORPORATION OF THE COMPANY IN INDIA

Although a promoter cannot be an agent of the company, he is promoting (since it will not yet exist)
he ‘must put himself in the position of an agent of the company which he has promoted, and must
regulate his relations towards the company according to the duty of an agent’41 – Lord McLaren in
Edinburgh Northern Tramways Co v Mann (1896). Thus, a promoter owes fiduciary duties to the
company which he is setting up. The duty is akin to the duty owed to the unborn child as no
company is yet in existence. Most obviously, where a promoter is selling property to a company, he
must ensure that he discloses any profit that he is making on the deal.

A promoter is subject to following liabilities under the various provisions of the Indian companies
Act. Section 56 and schedule II lay down matter to be stated and report to be set out in prospectus.
A promoter may be held liable for non-compliance of the provision of the section and
schedule.42Under section 62 and 63, a promoter may be held liable for any untrue statement in the
prospectus to a person who subscribe for shares or debentures on the faith of such prospectus.43

In Downey v. Byrd the plaintiff were stockholder of the Byrd publication company. The defendant,
that corporation’s promoter and organizers, issued a prospectus containing false and fraudulent
assertions concerning the assets of the corporation. This prospectus also represented that a contract
for the sale of property by them to the corporation had been approved by an independent board,
when in fact the directors were mere automatons in the hand of promoter. The plaintiff sued the
promoter for the fraud of the dummy director, inducing the purchase of share.44 Held that the acts
of the dummy directors, appointed by promoters, are the act of the promoters who must respond in
damages for the fraudulent representation including the purchase of corporate stock.
40
Pre-incorporation Contracts other than Stock Subscription, Temple Law Quarterly, Vol. 10. Issue 3(May 1936),
pp. 492-524,
41 BRIAN PILLANS & NICOLAS BOURNE, SCOTTISH COMPANY LAW 25-26 ( 2nd ed.1999)
42
A.K. Majumdar, & Dr. G.K. Kapoor, Taxmann’s Company Law and Practice, ed. 15th , pg. 123
43
Ibid
44
Corporations. Promoter's Liability for Fraud When Acting Through Dummy Directors, virgina Law Review, Vol.
17, No. 7 (May, 1931), pp. 713-714, ( Mar. 11, 2011), http://www.jstor.org/stable/1066487
 CONCLUSION

It has already been stressed that pre-incorporation agreements are a necessary stage in the process of
incorporation. Pre-incorporation contracts are a necessity in the business world, but the law on pre-
incorporation contracts has been continuously plagued with difficulties. The common law, bound by
precedent, is unable to govern these relationships satisfactorily. Statutory intervention is essential to
formulate suitable legal rule to facilitate pre-incorporation transaction. Present statutory regulation
of pre-incorporation transactions is inadequate. More could and should be done to improve the
content and efficacy of the existing rule. There is a need of most efficient rules under India’s current
company law regime can be made by reference to the possibility of the proposed company to
perform the contract. But where the possibility for the proposed to perform the contract does not
exist, either because the company is unable to perform the contract because of insolvency or
because no corporation has occurred a personal liability rule should be adopted

It is not a just and fair law that in each and every case the promoter is held liable. The contract
entered into by him for the incorporation of the company is not against any public policy. At last it
is for the benefit of the company and hence promoters should not personally be held liable if he
enters into a contract in utmost good faith. But every coin has two sides, and similarly there are few
situations in which promoters are personally liable. Thus, where a promoter negligently allows the
company to purchase property, including his own for more than it’s worth, he is personally liable to
the company for the loss it suffers. Similarly, a promoter who is responsible for making
misrepresentation in a prospectus may be held guilty of fraud under section 17, of Indian contract
Act and consequently liable for the damages under section 19 of the Indian contract Act.
 BIBLIOGRAPHY

Books:

Ø A. Ramaiya, Guide To The Companies Act,( 17th Edition), 2010, Lexis Nexis

Ø A.K.Majumdar & G.K.Kapoor, Taxmann’s Company LawAnd Practice, (15th Edition)

Ø David Minars, Corporation step by step,( 2nd Edition ), 2003
Ø Brian Pillans & Nicolas Bourne, Scottish Company Law25-26 ( 2nd ed.1999)
Ø Michael A. Adams, Essential Corporate Law 15-16 (1st ed.2002)

Articles:

Ø M. J. Whincop, An Economic and Jurisprudential Genealogy of Corporate Law (Ashgate,

Aldershot2001) 59.

Ø M. J. Whincop, "Of Dragons and Horses: FillingGaps in Pre-incorporation Contracts" (1998) 12 JCL
223-225.

Ø Poonam Puri, The Promise of certainty in the law of Pre-incorporation Contracts,Canadian Bar Review,
Vol. 80, pp. 1051-1064, 2001

Ø Paul J. Omar, Crossing time’s Boundaries: A Comparative View of Legal Response to the pre-
incorporation Contract, Sing J. Legal Stud. 77 (2005).

Ø John MCMullen,PremiliaryContracts byPromoters, The Cambridge Law Journal, Vol. 41, No. 1
(apr., 1982),pp. 47-50

Ø Dr. Joseph H. Gross, Liabilityon Pre-incorporation Contracts; A comparative review, 18 McGill L.J.
513 (1972)

Ø Jacob S. Ziegel, Promoter’s Liability and Pre-incorporation Contracts: Westcom Radio Group Ltd.
V.Maclsaac, 16 Can. Bus. L.J. 324 (1989-1990)

Ø William J. Rands ,high Pressure Sale Tactis and Dead Tree: What to do with Promoter Pre-incorporation
Contracts, Business Law Journal, Vol. 4, p. 1, 2007, U of Cinicinnati Public Law Research
Paper N0. 08-17

Ø Corporation: promoters: Liability of promoter to Corporation for Secret Profit, California Law
Review, Vol. 13, No. 3 (Mar., 1925), pp. 240-245
 Ø M. H. Ogilvie, Liabilityof person purportingto contract as Agent for unformed Company, University of
British Columbia LawReview, Vol. 17, Issue 2 (1983), pp. 321-346

Ø Pre-incorporation Contracts other than Stock Subscription, Temple Law Quarterly, Vol. 10.
Issue 3(May 1936), pp. 492-524,

Ø Corporations. Promoter's Liability for Fraud When Acting Through Dummy Directors,
virgina LawReview, Vol. 17, No. 7 (May, 1931), pp. 713-714

Ø R. W. Calloway, Pre-incorporation agreement, 11 Sw. L.J. 509 (1957)

Cases Referred:

Ø Lidney& Wigpool Iron Ore Ccompanyv. Bird [1866] 33 Ch. D 85

Ø Kelner v. Baxter (1866)LR 2 CP 174.
Ø Newborne v. Sensolid (1953) 1 All ER 708
Ø Phonogram Ltd vLane (1981) 3 All ER 182
Ø Cotronic (UK) Ltd vDezonie 1991 BCLC 721(CA)
Ø Erlanger v. NewSombrero Phosphate company (39 LT 269)
Ø Seth SobhagMal Lodha vEdward Mills ComapnyLtd(1972) 42 Com Cases 1 (Raj)
Ø Commissioner of Income Tax v. Bijli Cotton Mills Ltd. [1899] 2 Ch. 392 (p. 428, C.A.)
Ø Twycross vGrant ( 1877 ) 2 CPD 469 (CA)

Statutes:

Ø The Companies Act, 1956

Ø The Indian Contract Act, 1872
Ø The Specific Relief Act, 1963

Report:

Ø Lawrence Committee, Interim Report of the Select Committee on Company Law, (Toronto
: Legislative Assembly of Ontario, 1967)
Ø R.W. Dickerson, J.L. Howard, and L. Getz, Proposals for a NewBusiness Corporations Lawfor
Canada (Information Canada, 1971) [Dickerson Report].

Dictionary:

Ø Bryan A. Garner, Black’s LawDictionary, ed. 9th , pg. 1362