Assignment Week 6 Mgmt597

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Case Problem: 36-11 Goodman v. Darden, Doman & Stafford Associates. Was it ethical for Goodman to deny liability? Is Goodman personally liable? As states this case, John A. Goodman was areal estate salesman in the state of Washington. Goodman sold to Darden, Doman & Stafford Associates (DDS), a general partnership, an apartment building that needed extensive renovation. Goodman asserted that he personally had experience in renovation work. During the course of negotiations on a renovations contract, Goodman informed the managing partner of DDS that he would be forming a corporation to do the work. Thus, in august, DDS and “Building Design and Development” (in formation), where J John A. Goodman was a president, executed a contract. The lead-time required to complete the renovation was by October 15. Goodman subcontracted the work, but even the renovation was not completed on time. Besides DDS found that the work was completed was of poor quality. Goodman did not file the articles of incorporation for his new corporation until November1. The partners of DDS sued Goodman to hold him liable for the renovation contracts. Goodman denied personal liability. In this case, there is an issue that involves a promoter (Goodman), which is a person who organizes and starts a corporation, finds the initial investors to finance the corporation and so on. Promoters often enter into contracts on behalf of a corporation prior to its actual incorporation. As occurred in this case by the fact that the incorporation would be filed until November 1. In general on pre-incorporation contract, the promoters would be liable on a contract he makes for the benefit of a no-yet-formed. But also, because Goodman informed the managing partners of DDS that he would be forming a corporation, the promoters are not personally liable for pre-incorporation contract where the other party

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