Black v Smallwood [1966] HCA 2

Black v Smallwood [1966] HCA 2

Where both parties to a contract believed the company in whose name the contract was executed existed, and the individuals signed only in their capacity as purported directors, no personal liability arises; the contract is a nullity if the company does not exist at the time and there is no imputed intent to bind the individuals personally.

Jurisdiction
Australia
Procedural Posture
Appeal / Final Judgment in High Court of Australia
Outcome
Appeal dismissed with costs.
Legal Topics
['pre Incorporation Contracts' 'liability of Agents' 'specific Performance']
['contract Law' 'agency'] ['pre Incorporation Contracts' 'liability of Agents' 'specific Performance']

Case Brief

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Procedural Posture

Appeal / Final Judgment in High Court of Australia

Legal Issues

  1. 1 ['Whether persons purporting to contract as directors of a company not yet incorporated are personally liable on the contract.' 'Whether a contract signed by individuals in the name of a non-existent company binds those individuals personally.']

Ratio Decidendi

Where both parties to a contract believed the company in whose name the contract was executed existed, and the individuals signed only in their capacity as purported directors, no personal liability arises; the contract is a nullity if the company does not exist at the time and there is no imputed intent to bind the individuals personally.

Court Disposition

Appeal dismissed with costs.

Orders

  • ['Appeal dismissed with costs.']