When a business incorporates, is the company legally bound to honor previous contracts?

by Inha Leex Hale

Question by cerlandsen11: When a business incorporates, is the company legally bound to honor previous contracts?
My friend signed a 2 year accounting contract with a company to perform accounting duties. One year later, the company incorporates. He still is performing his duty as accountant under the contract he signed. Recently, the Board of Directors of the new corporation told him that they were cancelling the contract he signed. Can he file suit against this company for breach of contract ?

Best answer:

Answer by dusty_titus
You betcha, meanwhile, he should try to find new clients.

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