Newborne v Sensolid (Great Britain) Ltd
Rule established
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
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
- 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.
How to use it in an exam
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.
Source
Source: [1954] 1 Queen's Bench 45
This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.