What are pre-incorporation contracts?

WHAT ARE PRE-INCORPORATION CONTRACTS?

These are contracts entered into by a third party on behalf of a company which has not yet been formed. A pre-incorporation contract is binding on the third party who is acting on behalf of the unformed company.

·        A pre-incorporation contract is a contract entered into on behalf of a company before its incorporation

·       Until the company is incorporated, the company is therefore non existent

·        A non existent company is incapable to enter into contracts by itself and is unable to hire agents on its accord