RKO-Stanley Warner Theatres, Inc. v. Graziano
Pennsylvania Supreme Court
355 A.2d 830 (1976)
Jenofsky and Graziano (defendants) signed an agreement to buy land from RKO-Stanley Warner Theatres (RKO) (plaintiff), stating they intended to incorporate and that, if they did so before closing, the agreement 'shall be construed to have been made between' RKO and the resulting corporation. They filed articles of incorporation shortly before the closing date but never completed the purchase, and RKO sued them personally on the agreement. The trial court ruled for RKO, and the defendants appealed, arguing the incorporation clause released them from personal liability.
Whether, absent a clear agreement to the contrary, a promoter remains personally liable on a contract signed on behalf of a not-yet-formed entity even after that entity comes into existence.