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I am currently developing an application for a client and I have set up a contract so that everything runs smooth for both parties. The only problem is, I just recently started the process of creating/registering the Sole Propietorship. The contract I set up mentions my (not yet founded) company and the client. The thing is, I cannot sign the contract, because if I were to sign it now I would be doing that in the name of a company that technically does not exist yet.

My client wants to see the product prototype and we agreed in the contract (which we cannot sign) on an upfront payment, so the contract would prevent anything shady from happening.

Is there any way I can still secure that contract and payment, while not breaking the law ?

I thought about setting up a private contract to bind the client to signing the actual collaboration contract (which would be added as an exhibit to the contract) as soon as my actual company exists, is that legally reasonable ?

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  • What jurisdiction? What are you "registering"? A sole proprietorship exists the moment you claim it to. – feetwet♦ Oct 9 '15 at 17:15
  • @feetwet Correction: There is no company yet. – the_critic Oct 9 '15 at 17:23
  • You probably need to tell us where you're "registering" the company, and what you are registering it as, or under what statutory provision. Because in my jurisdiction there is no requirement to "register" a sole proprietorship or its name. – feetwet♦ Oct 9 '15 at 17:25
  • Well, any of that information would not be of any importance because there is no company at all. I don't understand what difference that would make if I told you the details ? I made a mistake in saying that the company exists. I basically applied to get into the commercial register with a particular name, but I have not got hold of a trade license yet. As I mentioned in my question, is there a way to agree to a contract to sign a contract in the future ? – the_critic Oct 9 '15 at 17:34
  • What is a trade license? What country are you in? It totally matters dude. – jqning Oct 9 '15 at 18:52
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Yes, there is no general restraint on signing a contract that incorporates conditions on future events. Most contracts are of that form – "For consideration X from Party A, Party B will (or will not) do Y."

You could certainly say, "If I establish entity A in timeframe B then the counterparty agrees to C."

Of course: You should consult a qualified lawyer to draft or review the terms if you want to ensure that the contract will have the desired effect and be enforceable.

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You can use a letter of intent.

LOIs resemble short, written contracts, but are usually in tabular form and not binding on the parties in their entirety. Many LOIs, however, contain provisions that are binding, such as those governing non-disclosure, governing law, exclusivity or covenants to negotiate in good faith.

Lifted from Wikipedia

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  • Why exactly would I want to use that ? – the_critic Oct 9 '15 at 18:40
  • I cannot tell you want you want to do or what you should do. A letter of intent is an option and might be a good fit for someone operating on behalf of a company that does not exist and who is selling a product that does not exist. – jqning Oct 9 '15 at 18:49

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