Pre-incorporation contract – Section 36C(1) of Companies Act 1985 – Section 2 of Law of Property (Miscellaneous Provisions) Act 1989 – Whether enforceable by signatory agent
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Pre-incorporation contract – Section 36C(1) of Companies Act 1985 – Section 2 of Law of Property (Miscellaneous Provisions) Act 1989 – Whether enforceable by signatory agent
Q A contract for the sale of Blackacre was signed by Jones as agent for Landslide Ltd, a company not then formed and which only came into existence shortly before the intended completion date. The buyer refuses to complete, contending that, for the purpose of section 2 of the Law of Property (Miscellaneous Provisions) Act 1989, the contract was not signed by, or on behalf of, each party to the contract. Can Jones enforce the contract?
A Yes: see Braymist Ltd v Wise Finance Co Ltd [2002] EWCA Civ 127; [2002] 09 EG 220 (CS), which held that this results from the interaction between common law agency rules and section 36C(1) of the Companies Act 1985, which implements the relevant European rule on pre-incorporation contracts.
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Respecter of Persons Estates Gazette 20 April 2002, p179
