Section 183 — Companies Act 1993: Warranties implied in pre-incorporation contracts

183 Warranties implied in pre-incorporation contracts (1) Notwithstanding any enactment or rule of law, in a pre-incorporation contract, unless a contrary intention is expressed in the contract, there is an implied warranty by the person who purports to make the contract in the name of, or on behalf of, the company— (a) That the company will be incorporated within such period as may be specified in the contract, or if no period is specified, then within a reasonable time after the making of the contract; and (b) That the company will ratify the contract within such period as may be specified in the contract, or if no period is specified, then within a reasonable time after the incorporation of the company. (2) The amount of damages recoverable in an action for breach of a warranty implied by subsection (1) of this section is the same as the amount of damages that would be recoverable in an action against the company for damages for breach by the company of the unperformed obligations under the contract if the contract had been ratified and cancelled. (3) If, after its incorporation, a company enters into a contract in the same terms as, or in substitution for, a pre-incorporation contract (not being a contract ratified by the company under section 182 of this Act), the liability of a person under subsection (1) of this section (including any liability under an order made by the Court for the payment of damages) is discharged. Compare: 1955 No 63 s 42A(4), (5), (8); 1983 No 53 s 15