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  • Post 1963 SRA Points

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    gautham
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    The document discusses India's position on the enforceability of pre-incorporation contracts after 1963. Key points include: 1) Section 15(h) and 19(e) of the Specific Relief Act 1963 allow companies and third parties respectively to enforce pre-incorporation contracts; 2) For a company to relieve a promoter's liability, the contract must be permitted in the MoA objects clause and expressly adopted/ratified by the company; 3) Case law has validated implied adoption in some cases; and 4) If not adopted, promoter remains liable as per Kenler v Baxter, though novation is another potential remedy.

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    Specific relief act post 1963 stance

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    The document discusses India's position on the enforceability of pre-incorporation contracts after 1963. Key points include: 1) Section 15(h) and 19(e) of the Specific Relief Act 1963 allow companies and third parties respectively to enforce pre-incorporation contracts; 2) For a company to relieve a promoter's liability, the contract must be permitted in the MoA objects clause and expressly adopted/ratified by the company; 3) Case law has validated implied adoption in some cases; and 4) If not adopted, promoter remains liable as per Kenler v Baxter, though novation is another potential remedy.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    13 views1 page

    Post 1963 SRA Points

    Uploaded by

    gautham
    The document discusses India's position on the enforceability of pre-incorporation contracts after 1963. Key points include: 1) Section 15(h) and 19(e) of the Specific Relief Act 1963 allow companies and third parties respectively to enforce pre-incorporation contracts; 2) For a company to relieve a promoter's liability, the contract must be permitted in the MoA objects clause and expressly adopted/ratified by the company; 3) Case law has validated implied adoption in some cases; and 4) If not adopted, promoter remains liable as per Kenler v Baxter, though novation is another potential remedy.

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    © All Rights Reserved
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    POSITION ON ENFORCEABILITY OF PRE-INCORPORATION CONTRACTS-POST 1963

     Specific Relief Act 1963


    1. 15(h)-Company can enforce the pre-incorporation contract against
    the third party
    2. 19(e)-Third party can enforce the pre-incorporation contract
    against the company
     Jenkins Committee Report 1962-Reccomendation to unilaterally adopt
     Main two requirements for relieving the promoter of his liability(by company after
    incorporation)
    1. The objects clause of the MoA belonging to the incorporated
    company should have permitted the pre-incorporated contract
    2. The company should expressly adopt or ratify the pre-
    incorporation contract and communicate the same to the other
    party
     Case precedent validating implied adoption-Weavers Mill Ltd v Balkies Ammal
     When company doesn’t adopt or ratify the pre-incorporation contract of the promoter
    1. Position of promoter as ruled in Kenler v Baxter
     Novation as another remedy - Howard V Patent Ivory Manufacturing Company (1888) 38
    Ch D 156
     Analysis of the current law

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