Jennifer, William’s wife, has a friend Thomas who is a promoter for a corporation dealing with e-learning services that is in the process of incorporating and needs a real estate agent to purchase assets for which Jennifer has agreed to do. b.
Jennifer found a property and was able to have the seller and the buyer sign all the necessary paper work for the contract to be sent off to be closed. i.
The conditions of the closing were that there was no deposit to be paid but that a special clause was to be included. c.
When the closing date arrived, Thomas, representing his un-incorporated business, did not have the funds. II.
Facts relevant to legal issue
The buyer was not able to fulfill the contract.
The contract - The clause - Any failure to close within 2 days of the stated closing date shall be deemed a breach of contract. Legal action against the buyer will ensue thereafter. However, if the buyer pays a non-refundable deposit of $2,000, legal action will not be taken, in lieu of retention of the $2,000. c.
The seller threatens legal action against all parties.
The buyer and the seller were signed into a contract where the buyer was to pay a deposit of $2000 instead of a down payment, but the contract would have to be closed within 2 days of the stated closing date. b.
The buyer was not able to come up with the funds to purchase the asset nor did he have the funds to pay for the $2000 deposit. c.
The legal issue arises on whether the seller has the right to take legal action and succeed in gaining any monetary compensation from Thomas, the promoter, or the business which has not been incorporated yet. Does Thomas have any liability toward the transaction? IV.
Pg. 334 of the “Business Law” textbook, “In the course of forming the corporation, the promoter may incur costs, make contracts, and do other acts in furtherance of the corporation. Since the promoter is not an agent, the corporation...
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