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Question
Helen is a promoter who, prior to forming Tile Co., contracted to purchase tile-manufacturing machinery from Owen Machinery Co. The contract was negotiated and entered into in the name of Tile Co. Subsequently, a certificate of incorporation was issued to Tile Co. In view of the facts stated which of the following statements is true?
A. When Tile received its certificate of incorporation, it became liable for the contract with Owen.
B. Helen is liable for the contract with Owen Machinery Co.
C. If Tile's board of directors issue a suitable resolution, Helen will be relieved from all liability for the contract with Owen.
D. Since Tile was not in existence at the time the contract was negotiated, the contract is void.
Answer
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