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Question: C, the promoter of a Company, entered into a contract with D to buy a plot of land for the company. After incorporation, the company refused to buy the land. Advice D about his rights against C and the Company. [BJS 1984]Find the question and answer of Company Law only on Legal Bites. [C, the promoter of a Company, entered into a contract with D to buy a plot of land for the company. After incorporation, the company refused to buy the land. Advice D about his rights against C and...

Question: C, the promoter of a Company, entered into a contract with D to buy a plot of land for the company. After incorporation, the company refused to buy the land. Advice D about his rights against C and the Company. [BJS 1984]

Find the question and answer of Company Law only on Legal Bites. [C, the promoter of a Company, entered into a contract with D to buy a plot of land for the company. After incorporation, the company refused to buy the land. Advice D about his rights against C and the Company.]

Answer

If D entered into a contract with C to sell a plot of land to the company and the company subsequently refuses to buy the land, D's rights will depend on the terms of the contract and the laws of the jurisdiction in which the contract was formed.

In general, if the contract is valid and enforceable, D can take legal action to enforce the contract and seek damages from C and/or the company for any losses suffered as a result of the company's refusal to buy the land. D may also be able to seek specific performance of the contract, which would require the company to purchase the land as outlined in the contract.

If the contract has a clause that binds the company as well, D can take legal action against the company for breach of contract.

If C has guaranteed the contract, D can seek the performance of the contract from C, as C is personally liable for the company's failure to perform the contract.

If the contract was entered into before the incorporation of the company, D may have a claim against C for misrepresentation or fraud, as C may have represented that the company would purchase the land, when in fact it did not intend to do so.

It is important for D to review the terms of the contract, any guarantees or representations made by C, and the laws of the jurisdiction to determine the appropriate course of action. It is advisable for D to take legal advice from an attorney to understand the specific rights and remedies available to him.

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Mayank Shekhar

Mayank Shekhar

Mayank is an alumnus of the prestigious Faculty of Law, Delhi University. Under his leadership, Legal Bites has been researching and developing resources through blogging, educational resources, competitions, and seminars.

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