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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA LW Exams › Preincorporation contract
Don was instrumental in forming Eden plc, which was registered and received its trading certificate in
December 20X4. It has subsequently come to the attention of the board of directors that the following events
had taken place prior to the incorporation of the company:
Don entered into a contract in the company’s name to buy computer equipment, which the board of
directors does not wish to honour.
Don entered into a contract in the company’s name to develop a particular patent, which the board of
directors of Eden wishes to pursue but in relation to which the other party does not wish to proceed.
Don entered into an agreement with Fad Ltd for business equipment. The agreement was made ‘subject to
adoption by Eden plc’ but now Eden plc does not wish to pursue the agreement.
Sir in this question can Don or Fad ltd claim reimbursement from Eden plc for the business equipment ?
No, neither Don nor Fad is able to claim against Eden