Question

Deepwater Dredging Company holds itself out to others as being a corporation but makes no attempt to incorporate. Estuary Marina signs a contract with Deepwater and Deepwater fails to perform. Estuary Marina files a suit against the firm. The court will likely hold that Deepwater is:

a. a corporation by estoppel.b. an alien corporation.c. an S corporation.d. ultra vires.

Answer 1

The correct option is A,a corporation by estoppel

Step-by-step explanation:

A business cannot relieve itself of its contractual obligation by merely saying it is not what it had presented itself to be ,since the law would prevent the business from doing that, on the basis that the other party has relied on such false information and dealt with the business on those false facts,hence there is no going back.

This is a case of corporation by estoppel, in that Deepwater even though does is not a body corporate at law but would be prevented from claiming not be properly registered corporate business in the transaction as believed by the counterparty-Estuary Marina,hence the law would compel Deepwater to perform under the contract agreement.

Answer 2

A) a corporation by estoppel.

Step-by-step explanation:

A court can determine that Deepwater is a corporation by estoppel because its employees acted like Deepwater was a real corporation: they used a corporation's name, told their business contacts that they were an actual corporation, and signed contracts using a corporation's name.

Since basically Deepwater impersonated a corporation, the court can rule that legally they are a corporation by estoppel since it was reasonable that a third party believed that they were.