Australian Capital Territory Consolidated Acts

COOPERATIVES ACT 2002 - SECT 56

    (1)     If a person enters into, or purports to enter into, a contract (the pre-registration contract ) on behalf of, or for the benefit of, a proposed cooperative, the cooperative becomes bound by the contract and entitled to its benefit if the cooperative, or a cooperative 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 cooperative 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)     Subject to section 57 (3), the person who entered into, or purported to enter into, the pre-registration contract is liable to pay damages to each other party to the contract if a cooperative is not registered, or a cooperative 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)     if a period agreed to by the parties to the contract—within that period.

    (4)     The maximum amount of damages the person is liable to pay to a party is the amount the cooperative would be liable to pay to the party if the cooperative had been registered and had ratified the contract and then completely failed to perform it.

    (5)     If a proceeding is brought to recover damages under subsection (3) because the cooperative 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 just in the circumstances, including ordering the cooperative—

        (a)     to pay all or part of the damages that the person is liable to pay; and

        (b)     to transfer property that the cooperative received because of the contract to a party to the contract; and

        (c)     to pay an amount to a party to the contract.

    (6)     If the cooperative 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 cooperative is ordered to pay.