How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Mr. Gregory White Your Own Question

Mr. Gregory White
Mr. Gregory White, Master's Degree
Category: Business and Finance Homework
Satisfied Customers: 5223
Experience:  M.A., M.S. Education / Educational Administration
Type Your Business and Finance Homework Question Here...
Mr. Gregory White is online now
A new question is answered every 9 seconds

Mary wishes to create a corporation to operate an art

Customer Question

Mary wishes to create a corporation to operate an art gallery. She completes the articles of incorporation and mails them to the appropriate state office. Then, she leases space, hires a receptionist, buys supplies, and contracts with artists to exhibit their artwork, all on behalf of her corporation. Sometime later, the state issues its certificate of incorporation.i. Discuss the liability of Mary and the corporation with regard to these contracts Mary has made.
ii. Discuss novation based upon the above fact situation.
Submitted: 6 months ago.
Category: Business and Finance Homework
Expert:  Mr. Gregory White replied 6 months ago.
Hello, my name is Greg. I am not sure about part 1 - was there more info? Part 2A novation means that a party to a contract is relieved of liability for the terms of the contract when another party takes on the contractual duties or responsibilities of the contract. This is what occurs when a corporation after incorporation ratifies any contracts entered into by its incorporator. If the corporation Mary forms performs a novation of Mary on the contracts she entered into, then Mary would be unable to claim that the contracts were not binding because the corporation did not exist at the time they were signed. In the novation the corporation takes the place of Mary and makes itself liable on the contract even though it was not originally liable or a party to the contract