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If Callie Sues Min-Ji,Marcus,and Penelope for Unpaid Amounts Without a Novation

Question 8

Multiple Choice

If Callie sues Min-ji,Marcus,and Penelope for unpaid amounts without a novation in place,what would be the most likely result?


A) Min-ji,Marcus,and Penelope will win so long as they can prove that Callie knew that the feed was purchased for a new corporation and not for their personal farm use.
B) Callie would likely win unless it can be established that the new corporation is making a profit and is able to pay her.
C) Callie would likely win because courts generally hold promoters liable and rule that preincorporation contracts do not bind the new corporation.
D) Callie 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.
E) Min-ji,Marcus,and Penelope will win unless they have already paid partial amounts leading Callie to expect that they,not the corporation,had accepted liability.

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