Newborne v Sensolid (Great Britain) Ltd

Facts

A contract to sell tinned ham was signed 'Leopold Newborne (London) Ltd', with Newborne's name underneath. The company had not yet been registered. The buyer refused to take the goods.

Issue

Could Newborne enforce the contract personally?

Held

No. The contract was made by the company, which did not exist, so there was no contract. Newborne had signed only to authenticate the company's signature.

Principle

A contract signed in the name of a company that does not exist may be a nullity.

Why it matters

Section 59 of the Act now makes the person who acted bound and entitled until ratification.

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