52Contracts before registration

52 Contracts before registration (1) If a person enters into, or purports to enter into, a contract on behalf of, or for the benefit of, a proposed co-operative (pre-registration contract), the co-operative becomes bound by the contract and entitled to its benefit if the co-operative, or a co-operative that is reasonably identifiable with it, is registered and ratifies the contract: (a) within a reasonable period after the contract is entered into; or (b) within any period agreed to by the parties to the contract. (2) The person is released from any liability under the pre-registration contract if the co-operative enters into another contract in substitution for it: (a) within a reasonable period after the pre-registration contract is entered into; or (b) within any period agreed to by the parties to the pre-registration contract. (3) The person is liable to pay damages to each other party to the pre-registration contract if a co-operative is not registered, or a co-operative is registered but does not ratify the contract or enter into a substitute for it: (a) within a reasonable period after the contract is entered into; or (b) within the period agreed to by the parties to the contract. (4) The maximum amount of damages the person is liable to pay to a party is the amount the co-operative would be liable to pay to the party if the co-operative had been registered and had ratified the contract and then completely failed to perform it.

Co-operatives (National Uniform Legislation) Act 2015 56 (5) If proceedings are brought to recover damages under subsection (3) because the co-operative is registered but does not ratify the pre-registration contract or enter into a substitute for it, the court may do anything it thinks just in the circumstances, including ordering the co-operative: (a) to pay all or part of the damages the person is liable to pay; or (b) to transfer property the co-operative received because of the contract to a party to the contract; or (c) to pay an amount to a party to the contract. (6) If the co-operative 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 co-operative is ordered to pay.