Hi, I am looking for someone to write an article on corp case study Paper must be at least 500 words. Please, no plagiarized work! Case Study: John A. Goodman v. Darden, Doman & Stafford Associates et al The case in hand arose from an appeal preferred to the Supreme Court of Washington by the promoter of a corporation to dismiss him as a party to arbitration proceeding being conducted pursuant to the preincorporation contract which he made before (John A. Goodman 1).
1. Issues of the Case
The issues of the case can be summed up as follows:
A narrow issue of this case was whether Goodman, was a party to the arbitration proceedings which was brought under the preincorporation contract (John A. Goodman 3).
Another issue to be determined in this case is whether Goodman should be taken as a party to the preincorporated contract and as such whether he has an obligation to take part in the arbitration (John A. Goodman 4).
The other issue of the case was whether there was substantial evidence that Darden, Doman & Stafford Associates (DDA) accepted the obligation of a corporation not yet formed and did not hold John Goodman as a responsible individual, as noted in the dissenting opinion (John A. Goodman 7).
2. Rule of the Case
The case gave the following rule:
When it cannot be concluded by evidence that the parties to the contract other than the promoter, looked solely to the corporation and not to the promoter for performance of the contract, the promoter becomes liable for the preincorporation contract made by him. As such decision was passed against Goodman, making him liable under the preincorporation contract (John A. Goodman 3).
3. Analysis of the Case
The Supreme Court of Washington went through a detailed analysis to arrive at the decision, which is mentioned below:
As Goodman or the promoter in this case alleged that DDS agreed to look solely to the corporation, he will have the burden of proving the agreement. The release of the promoter depends on the intent of the party when the promoter depends on the agreement. However, Goodman’s arguments that the terms “in formation” in the contract and “… warranties contained herein shall be construed to have been made between seller and resultant corporation…” were in fact ambiguous as they did not expressly state about the release from personal liability of the promoter (John A. Goodman 5-6).
While determining whether the trial court’s decision was correct based on the evidence, the court found that the trial court gave its decision in favor of Goodman based on three considerations, which are: 1) DDS knew the corporation did not exist. 2) The fact that Doman was informed by Goodman about the formation of the corporation. and 3) progress payments were made to the corporation. However, the above considerations are not dispositive in any way of the intent of DDS to hold Goodman personally liable. As such the evidence not being substantial to show the intent to release Goodman from his personal liability, he was held a party to the contract (John A. Goodman 6- 7).
4. Conclusion
The decision concurs with the general rule that a promoter is liable for a preincorporation contract made for the benefit of a contemplated corporation, which has not yet been organized and the exception to this rule that the promoter is not a party to the contract, when the other party looks solely to the corporation for performance of the contract, before the corporation is formed (John A. Goodman 4-5).. The Supreme Court’s decision is absolutely correct as the promoter was taken to be a party to the contract, when it was found that evidence precluded him from coming within the exception and showed that he fell within the ambit of the general rule.
Works Cited
John A. Goodman, Petitioner, v. Darden. Doman & Stafford Associates, an unincorporated association et al. westlaw.com. Thompson Reuters, 2010. Web. 11 Oct. 2011.
