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Difference between preliminary contract and provisional …

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Difference between preliminary contract and provisional contract

    • Posted by Tanvir Mansuri 3 years, 5 months ago

    CBSE > Class 11 > Business Studies
    • 1 answers

    Sia ? 3 years, 5 months ago

    Basis

    Preliminary Contract

    Provisional Contract

    1.

    Meaning

    Preliminary contracts are the contracts, which are made before the formation of the company

    The contracts which are entered by a company after incorporation but before it is entitled to commence business are provisional Contracts

    2.

    Enforcement of contract

    Neither the company can sue nor can it be sued to enforce the preliminary contracts.

    Can be enforced only on receiving certificate of Commencement of Business.

    3

    Contracts related to

    Preliminary contracts may relate to property which the promoters desire to purchase for the company or they may be made with the persons whose know-how is vital to the success of company.

    It is not so with the provisional contracts

    4

    Applicable for

    Both private and public company

    Only public company

    0Thank You

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