Phonogram Ltd v Lane
1981 · [1982] QB 938 (CA)
Posted By lanbuk.com
- Facts
- Lane signed for 'Fragile Management Ltd', a company not yet formed, to obtain money from Phonogram. The company was never formed.
- Issue
- Was Lane personally liable under the statutory rule on ?
- Held
- Yes. The Court of Appeal held that signing 'for and on behalf of' the company was not an agreement excluding personal liability.
- Principle
- An agreement excluding the agent's personal liability must be clear.
- Why it matters
- It is persuasive on the 'express agreement to the contrary' wording in section 59.
Words and Latin in this note
- Pre-incorporation contract
- A contract made for a company before it is registered. Under section 59 of the Companies Act 2009 the company may ratify it after formation; until then the person who acted is personally bound unless expressly agreed otherwise. Open the note.
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