State in brief the law regarding promoters' contract. Draft a specimen promoters' contract for the purchase of an industrial plot for setting-up an industrial unit of the proposed company PMQ Ltd.

Companies Act, 2013 does not contain any provisions about Promoter's Contract. The promoters of a company usually enter into contracts to acquire some property or right for the company which is yet to be incorporated; such contracts are called preliminary or pre-incorporation contracts. The promoters generally enter into such contracts as agents for the company about to be formed. When the company comes into existence, it is not bound by the pre-incorporation contracts even when it takes the benefit of the work done on its behalf. However, specific performance of a contract between a third party and the promoters may be successfully claimed by the third party against the company, when the company enters into possession of the property on the faith of the promoters' contract. A Specimen of Promoters' Contract for the Purchase of an Industrial Plot for setting up Industrial Unit of the Proposed Company PMQ Ltd. THE AGREEMENT made on............day of............between Mr. P, son of Mr............resident of............, Mr. M, son of Mr............resident of............and Mr. Q, son of Mr............resident of............(hereinafter referred to as "promoters") of the one part which expression shall, unless repugnant to the context include their heirs, legal representatives and assigns and Mr. "V" son of Mr............resident............(hereinafter referred as "Vendor") of the other part, which expression shall, unless repugnant to the context, include his heirs, legal representatives and assigns. WHEREAS the promoters have been engaged for quite sometime in the past in promoting and forming a company to be known as PMQ Ltd., which name has been made available to the promoters by the Registrar of Companies............, consequent upon which they have filed with the Registrar memorandum of association and articles of association for registration of the company; AND WHEREAS the memorandum and articles of association of the proposed PMQ Ltd., empower the company and its directors to enter into agreements on its incorporation on the lines of the agreement entered into by the promoters for the purchase of land, plant, machinery, equipment and for hiring the services of persons required for and in connection with the formation and incorporation of the company; AND WHEREAS the Vendor is the absolute owner of industrial plot of land measuring............And situated at............and is desirous of selling the same; AND WHEREAS the promoters and desirous to buy the said plot of land for the proposed company PMQ Ltd. to set up an industrial unit on its incorporation. NOW IT IS AGREED AND DECLARED BETWEEN AND BY THE PARTIES AS FOLLOWS: That the said vendor shall sell and the promoters shall purchase the industrial Plot No............Situated in the............Industrial Area, ............bounded on North by............on South by............on East by............, and on West by............in consideration of the payment, by the promoters on the date of this agreement, of the sum of ₹............and the balance of ₹............on the date of the appearance of the vendor and the promoters before the Sub- Registrar............at the time of registration of the deed of sale to this agreement. The vendor shall satisfy the promoters or PMQ Ltd., if incorporated by then, about the title of the vendor to the aforesaid piece of land within one month of the execution of this agreement. The parties shall bear the expenses of sale equally. The purchaser shall pay to the vendor the expenses for purchase of stamp, a fortnight before the expiry of the period fixed for this agreement for completion of the sale and the promoters shall also at the same time deliver to the vendor a draft of the deed of sale. The vendor shall deliver actual possession of the plot of land to the promoters or the company on the date of payment of the balance of the price aforementioned and shall do all other acts that may be necessary or requisite to effectually put the promoters or PMQ Ltd., as the case may be, in such possession. IN WITNESS WHEREOF the parties aforementioned have signed this deed of acceptance of the terms thereof. Witness Witness Vendor Purchasers/Promoters of the Company PMQ Limited, under incorporation. P M Q (Schedule of Land)