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Which of the Following Is the Most Likely Result If

Question 50

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Which of the following is the most likely result if Belinda sues Martha,Greg,and Prudence for unpaid amounts without a novation in place?


A) Belinda would likely win because courts generally hold promoters liable and rule that preincorporation contracts do not bind the new corporation.
B) Belinda would likely win unless it can be established that the new corporation is making a profit and is able to pay her.
C) Belinda would likely win unless it can be established that the new corporation was capitalized with at least $100,000 and is able to pay her.
D) Martha, Greg, and Prudence will win so long as they can prove that Belinda knew that the feed was purchased for a new corporation and not for their personal farm use.
E) Martha, Greg, and Prudence will win unless they have already paid partial amounts leading Belinda to expect that they, not the corporation, had accepted liability.

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