Corporations Act 2001
If a person enters into, or purports to enter into, a contract on behalf of, or for the benefit of, a company before it is registered, the company becomes bound by the contract and entitled to its benefit if the company, or a company that is reasonably identifiable with it, is registered and ratifies the contract:
(a) within the time agreed to by the parties to the contract; or
(b) if there is no agreed time - within a reasonable time after the contract is entered into. 131(2) [ Liability for damages]
The person is liable to pay damages to each other party to the pre-registration contract if the company is not registered, or the company is registered but does not ratify the contract or enter into a substitute for it:
(a) within the time agreed to by the parties to the contract; or
(b) if there is no agreed time - within a reasonable time after the contract is entered into.
The amount that the person is liable to pay to a party is the amount the company would be liable to pay to the party if the company had ratified the contract and then did not perform it at all.
131(3) [ Powers of the court]If proceedings are brought to recover damages under subsection (2) because the company is registered but does not ratify the pre-registration contract or enter into a substitute for it, the court may do anything that it considers appropriate in the circumstances, including ordering the company to do 1 or more of the following:
(a) pay all or part of the damages that the person is liable to pay;
(b) transfer property that the company received because of the contract to a party to the contract;
(c) pay an amount to a party to the contract. 131(4) [ Failure to perform contracts]
If the company ratifies the pre-registration contract but fails to perform all or part of it, the court may order the person to pay all or part of the damages that the company is ordered to pay.
SECTION 132 PERSON MAY BE RELEASED FROM LIABILITY BUT IS NOT ENTITLED TO INDEMNITY 132(1) [ Release]A party to the pre-registration contract may release the person from all or part of their liability under section 131 to the party by signing a release.
132(2) [ Indemnity]Despite any rule of law or equity, the person does not have any right of indemnity against the company in respect of the person's liability under this Part. This is so even if the person was acting, or purporting to act, as trustee for the company.
SECTION 133 133 THIS PART REPLACES OTHER RIGHTS AND LIABILITIESThis Part replaces any rights or liabilities anyone would otherwise have on the pre-registration contract.