Sarah, along with three others, is in the process of incorporating a new company called Shoppers Playground Pty Ltd. The purpose of the company is to develop a huge shopping complex. A large industrial site is for sale and Sarah is of the view that it would be an ideal site for the development. She does not wish to miss the opportunity and so she negotiates a price and enters into a contract to buy the land. Sarah signs the contract for sale of the land and the lease 'for and on behalf of Shoppers

Playground Pty Ltd' and a deposit is paid from funds contributed by each of the group. Luckily, Sarah was able to negotiate a lengthy settlement clause in the contract. Sarah and her three associates begin to make plans for the construction of their development proposal on this site. The company is finally incorporated, although its name had to be changed to Shop and Play Pty Ltd as the other name (Shoppers Playground) was already reserved. The new Board, which included Sarah, decided to have the land fenced even though the contract was not finalized and the company paid for this to be done. Meanwhile, land values fell and the new Board was of the view that the purchase price was too high. When it came to settle the contract the company refused to do so arguing that it was never a party to the contract anyway. Advise the company whether it is liable to finalise the purchase?