Companies Act 2006 c.

46 Part 4 A COMPANY'S CAPACITY AND RELATED MATTERS Other matters

This version in force from: October 1, 2009 to present (version 1 of 1)

51 Pre-incorporation contracts, deeds and obligations

(1) A contract that purports to be made by or on behalf of a company at a time when the company has not been formed has effect, subject to any agreement to the contrary, as one made with the person purporting to act for the company or as agent for it, and he is personally liable on the contract accordingly. (2) Subsection (1) applies (a) to the making of a deed under the law of England and Wales or Northern Ireland, and (b) to the undertaking of an obligation under the law of Scotland, as it applies to the making of a contract.

AnnotationGeneral Notes Library Section 51

Derivation of section Subsection (1) replaces Companies Act 1985 s.36C(1). Subsection (2) replaces Companies Act 1985 s.36C(2).

Introduction
The Governments Explanatory Notes (see General Note: Explanatory Notes) say:

A company is not bound by a contract purportedly made on its behalf before it came into existence unless the obligations are novated, i.e. a new contract must come into existence after incorporation on the same terms as the old one. Novation may be express or implied. Subsection (1) Company see s.1. Subsection (2) See General Note: England and Wales. See General Note: Northern Ireland. See General Note: Scotland. << Previous Provision | Next Provision >> Crown Copyright material is reproduced with the permission of the Controller of HMSO and the Queens Printer for Scotland Subject: Company law Keywords: Deeds; Novation; Pre-incorporation contracts