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182: Pre-incorporation contracts may be ratified
or “Companies can approve contracts made before they were officially formed”
You could also call this:

“Promises made when setting up contracts for future companies”

When someone makes a contract for a company before it exists, they promise two things. First, they promise that the company will be created within the time stated in the contract. If no time is given, it should happen within a reasonable time after making the contract. Second, they promise that once the company is created, it will agree to the contract within the time stated. If no time is given, it should happen within a reasonable time after the company is created.

If these promises are broken, you can ask for money to make up for it. The amount you can get is the same as if the company had agreed to the contract and then cancelled it.

If the company is created and then makes a new contract that’s the same as or replaces the old one (but not one it agreed to under section 182), the person who made the original promises is no longer responsible. This includes any money a court might have told them to pay.

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Next up: 184: Failure to ratify

or “What happens if a company doesn't approve a contract made before it was formed”
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Part 10 Administration of companies
Pre-incorporation contracts

183Warranties implied in pre-incorporation contracts

  1. Notwithstanding any enactment or rule of law, in a pre-incorporation contract, unless a contrary intention is expressed in the contract, there is an implied warranty by the person who purports to make the contract in the name of, or on behalf of, the company—

  2. that the company will be incorporated within such period as may be specified in the contract, or if no period is specified, then within a reasonable time after the making of the contract; and
    1. that the company will ratify the contract within such period as may be specified in the contract, or if no period is specified, then within a reasonable time after the incorporation of the company.

      1. The amount of damages recoverable in an action for breach of a warranty implied by subsection (1) is the same as the amount of damages that would be recoverable in an action against the company for damages for breach by the company of the unperformed obligations under the contract if the contract had been ratified and cancelled.

      2. If, after its incorporation, a company enters into a contract in the same terms as, or in substitution for, a pre-incorporation contract (not being a contract ratified by the company under section 182 ), the liability of a person under subsection (1) (including any liability under an order made by the court for the payment of damages) is discharged.

      Compare
      • 1955 No 63 s 42A(4), (5), (8)
      • 1983 No 53 s 15