Question

Boyle, as a promoter of Delaney Corp., signed a 9-month contract with Austin, a CPA. Prior to the incorporation, Austin rendered accounting services pursuant to the contract. After rendering accounting services for an additional period of 6 months pursuant to the contract, Austin was discharged without cause by the board of directors of Delaney. Absent agreements to the contrary, who will be liable to Austin for breach of contract?

Answer 1

Options are:

A. Both Boyle and Delaney.

B. Boyle only.

C. Delaney only.

D. Neither Boyle nor Delaney.

Answer:

A. Both Boyle and Delaney.

Explanation:

Boyle who has acted as a promoter of a corporation which didn't exist, was personally liable. Furthermore, Delaney is also liable here because it kept accepting the services of Austin's performance and later denied without cause which means the damages to Austin was caused by the company as well. So both of these parties are liable to Austin.