Pre incorporation contractNullityCourt of Appeal

Newborne v Sensolid (Great Britain) Ltd

[1954] 1 Queen's Bench 4519541 min read
The case in brief30-second read
Facts
Leopold Newborne entered into a contract to sell goods. The contract was signed "Leopold Newborne (London) Ltd" with Leopold signing underneath as agent/director of the company.
Issue
Whether a contract signed by a person solely as agent of a non-existent company is enforceable: either against the company or against the agent personally.
Held
The Court of Appeal held the contract was a nullity. The "company" did not exist, so there was no principal. Without a principal, there can be no agent. Leopold did not sign personally; he signed only as agent. Since no one was a party to the contract, it was void and unenforceable by or against anyone.
Principle
A contract signed by a promoter solely as 'agent' of a non-existent company is a nullity; no principal exists, so no agency exists, and no one is bound
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Facts

  • Leopold Newborne entered into a contract to sell goods.
  • The contract was signed "Leopold Newborne (London) Ltd" with Leopold signing underneath as agent/director of the company.
  • The company had not yet been incorporated at the time of signing.

Issue

  1. Whether a contract signed by a person solely as agent of a non-existent company is enforceable: either against the company or against the agent personally.

Held

  • The Court of Appeal held the contract was a nullity. The "company" did not exist, so there was no principal. Without a principal, there can be no agent. Leopold did not sign personally; he signed only as agent. Since no one was a party to the contract, it was void and unenforceable by or against anyone.

Ratio decidendi

If a promoter signs a contract only in the capacity of agent/director of a non-existent company (company named as principal), the contract is a nullity. Contrasted with Kelner v Baxter (1866): if a promoter signs personally (even adding "on behalf of future company"), the promoter is personally bound. The distinction is purely one of drafting: how the contract identifies the parties.

Exam use

How to use it in an answer

Critical counterpart to Kelner v Baxter. Together they establish: sign personally = personally bound; sign only as agent of non-existent principal = nobody bound (nullity). Teaches promoters to be careful about how they sign pre-incorporation contracts.

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Citation

Newborne v Sensolid (Great Britain) Ltd [1954] 1 Queen's Bench 45

Reported: [1954] 1 Queen's Bench 45. This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.