Next Generation Bar Exam Quiz
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BUSINESS ASSOCIATIONS AND RELATIONSHIPS
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Rosen v. Summit Ventures, Inc. (Ct. App. 2022): A promoter's preincorporation services are not compensable from corporate funds unless, after full disclosure, the corporation expressly or by clear implication promises to pay for them. Ratification of contracts the promoter negotiated with third parties is not such a promise. In the absence of a post-incorporation promise, the promoter cannot recover the value of services or expenses in quantum meruit, even if those efforts enriched the corporation.
Lena spent 400 hours preparing a business plan, recruiting investors, and negotiating a supply agreement and a lease for Beacon Labs, Inc. She also paid $8,000 of filing and professional fees. After Beacon was incorporated, the board reviewed the supply agreement and lease, voted to ratify both, and passed a resolution thanking Lena for her 'extraordinary work.' No board action authorized paying Lena. Lena later demanded $40,000 for services and $8,000 for expenses.
Under Rosen, may Lena recover from Beacon?
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