law

Mr. Bunny sold a ten-acre property to Bakers Delight Ltd (BDL), a private limited company he was about to incorporate at a profit of $500,000. He did not disclose this information to Brian and Fred, who were prospective shareholders of BDL at the time. In addition, Mr. Bunny signed a contract on behalf of the company which was not yet incorporated for the supply of sugar from Sugary Ltd. The sugar was supplied to BDL after incorporation and was consumed. Bakers Delight Ltd is experiencing difficulties in paying for the sugar. The common law position is: a. A pre-incorporation contract is binding on both companies after it is formed b. A pre-incorporation contract is not binding on the company after it is formed c. A pre-incorporation contract is binding on the company after it is formed