Plain language law

New Zealand law explained for everyone

Companies Act 1993

Administration of companies - Pre-incorporation contracts

184: Failure to ratify

You could also call this:

“What happens if a company doesn't approve a contract made before it was formed”

If a company doesn’t approve a contract that was made before it was officially formed, you can ask the court for help. You can do this if you were part of that contract. You can ask the court to make the company give back any property it got from the contract. The property could be real things you can touch or other kinds of property. You can also ask the court for other types of help related to that property. Another option is to ask the court to make the whole contract or part of it valid.

The court can decide what’s fair and just. It can make any order or give any help it thinks is right. The court can do this even if an order hasn’t been made under section 183(2).

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM320853.

Topics:
Business > Industry rules
Business > Fair trading
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183: Warranties implied in pre-incorporation contracts, or

“Promises made when setting up contracts for future companies”

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185: Breach of pre-incorporation contract, or

“What happens if a company breaks a contract made before it was formed”

Part 10 Administration of companies
Pre-incorporation contracts

184Failure to ratify

  1. A party to a pre-incorporation contract that has not been ratified by the company after its incorporation may apply to the court for an order—

  2. directing the company to return property, whether real or personal, acquired under the contract to that party; or
    1. for any other relief in favour of that party relating to that property; or
      1. validating the contract whether in whole or in part.

        1. The court may, if it considers it just and equitable to do so, make any order or grant any relief it thinks fit and may do so whether or not an order has been made under section 183(2).

        Compare
        • 1955 No 63 s 42A(6)
        • 1983 No 53 s 15