38 Pre-incorporation contracts

(1) A person who enters into a contract in the name of or on behalf of a
company before the company is incorporated, is personally bound by,
liable under and entitled to the benefits of the contract, except where —

(a) the contract specifically provides otherwise; or

(b) subject to any provisions of the contract to the contrary, the
company ratifies the contract under subsection (2).

(2) A company may, by any action or conduct signifying its intention to be
bound by a contract entered into in its name or on its behalf before it was
incorporated, ratify the contract after the company‘s incorporation.


(3) When a company ratifies a contract under subsection (2) —

(a) the company is bound by, liable under and entitled to the benefits
of the contract as if the company had been incorporated at the
date of the contract and had been a party to it; and

(b) subject to any provisions of the contract to the contrary, the
person who acted in the name of or on behalf of the company
ceases to be personally bound by, liable under or entitled to the
benefits of the contract.