Week 6 Homework - Rosa M. Santos D01313397 Week 6 Homework...

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Rosa M. Santos D01313397 Week 6 Homework 36.11 John Goodman No, it was not unethical for Goodman to deny personal liability. At the time the contract was signed Goodman informed DDS that a corporation was being formed to do the work. While the articles of corporation weren’t actually completed until after the work was supposed to be finished, at all times Goodman represented that a corporation was doing the work and signed the contract on behalf of the corporation. Whether he will successfully maintain a corporate identity throughout the lawsuit is unlikely, but ethically he is okay. The general rule is that a promoter is personally liable for the acts made on behalf of a corporation in formation. There is an exception, however, when the contracting party knows that the corporation is in formation and consents to hold the corporation liable for performance rather than the promoter. The fact that the contract stated it was formed with a corporation in formation is not sufficient to prove that the promoter will not be held liable. Silence does not mean acceptance. However,
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Week 6 Homework - Rosa M. Santos D01313397 Week 6 Homework...

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