Court Of Chancery Holds Individual Buyers Liable For "Corporate" Debt
In this unusual case, the Court of Chancery held individuals liable on a contract that was signed by a corporation. Why? The corporation did not exist. Apparently, the buyers intended to form the entity, but had a fight with their lawyer and never got around to doing the incorporation. While they argued that they had expressly refused to guarantee the contract, the Court held they could not both take the benefits of the deal themselves and then not pay for it. Big surprise!