Are Pre Incorporation Contracts Enforceable

Pre incorporation contract is binding on a company or promoters after incorporation when it is according to the object of the company and it is accepted after incorporation. After acceptance of pre-incorporation contracts by the company, it should also be communicated to parties.

Are pre incorporation contracts binding?

Pre incorporation contract is binding on a company or promoters after incorporation when it is according to the object of the company and it is accepted after incorporation. After acceptance of pre-incorporation contracts by the company, it should also be communicated to parties.

Can contracts before incorporation be enforced against the company?

U/s 19 (e), Except as otherwise provided by this Chapter, specific performance of a contract may be enforced against the company, when the promoters of a company have, before its incorporation, entered into a contract for the purpose of the company and such contract is warranted by the terms of the incorporation.