Co-operatives Act, 2005 (Act No. 14 of 2005)Chapter 2 : Registration, Constitution, Powers of Co-operative and Registered Office and Record Keeping by Co-operativePart 1 : Application to register and name9. Pre-incorporation contract |
| (1) | A person who enters into a written contract in the name of, or on behalf of, a co-operative before it is registered is personally bound by the contract, unless that contract expressly provides otherwise. |
| (2) | A co-operative may, within a month after its registration, ratify the contract referred to in subsection (1) by ordinary resolution at a general meeting. |
| (3) | If a co-operative ratifies a contract under this section— |
| (a) | that co-operative is bound by the contract; and |
| (b) | a person who originally entered into the contract ceases to be personally bound by it. |
[Section 9(3)(b) substituted by section 8(a) of Notice No. 558, GG 36729, dated 5 August 2013]
| (4) | If a co-operative does not ratify the contract, or is not deemed to have done so in terms of subsection (8), the person who originally entered into the contract continues to be personally bound by the contract, unless the contract expressly provides otherwise. |
[Section 9(4) substituted by section 8(b) of Notice No. 558, GG 36729, dated 5 August 2013]
| (5) | Where the contract is entered into by more than one person and unless the contract provides otherwise, all of those persons will be personally, jointly and severally liable under the contract in the event that it is not ratified by the subsequently incorporated co-operative. |
[Section 9(5) inserted by section 8(c) of Notice No. 558, GG 36729, dated 5 August 2013]
| (6) | If the co-operative wishes to ratify the pre-incorporation contract, it must ratify the whole contract and all of its terms. |
[Section 9(6) inserted by section 8(c) of Notice No. 558, GG 36729, dated 5 August 2013]
| (7) | If, after its incorporation, a co-operative enters into a contract on the same terms as, or in place of, a contract contemplated in subsection (1), the liability of the person who entered into such contract in the name of or on behalf of the co-operative will be discharged. |
[Section 9(7) inserted by section 8(c) of Notice No. 558, GG 36729, dated 5 August 2013]
| (8) | Where a co-operative receives written notification of the existence of a pre-incorporation contract and does not expressly ratify or reject the pre-incorporation contract by way of a resolution within three months of the date of receipt of the written notification, the co-operative will be deemed to have ratified that contract. |
[Section 9(8) inserted by section 8(c) of Notice No. 558, GG 36729, dated 5 August 2013]