Part 1 — Incorporating a Cooperative Division 1 Application to Incorporate
15 Pre-incorporation contracts
subsection (2) and all parties to the contract referred to in that
subsection
(a) believe that the cooperative exists and is incorporated under,
or
(b) intend that the cooperative is to be incorporated under
the laws of a jurisdiction other than Alberta.
(2) Except as provided in this section, if a person enters into a
written contract in the name of or on behalf of a cooperative before
it comes into existence,
(a) that person is deemed to warrant to the other party to the
contract
(i) that the cooperative will co me into existence within a
reasonable time, and
(ii) that the contract will be adopted within a reasonable
time after the cooperative comes into existence,
(b) that person is liable to the other party to the contract f or
damages for a breach of that warranty, and
(c) the measure of damages for that breach of warranty is to b e
the same as if the cooperative existed when the contract was
made, the person who made the contract on behalf of the
cooperative had no authority to do so and the cooperative
refused to ratify the contract.
(3) A cooperative may, within a reasonable time after it comes into
existence, by any act or conduct signifying its intention to be bound
by it, adopt a written contract made in its name or on its behalf
before it came into existence, and on the adoption
(a) the cooperative is bound b y the contract and is entitled to
the benefits of the contract as if the cooperative had been in
existence at the date of the contract and had been a party to
it, and
(b) a person who purported to act in the name of or on behalf of
the cooperative ceases, except as provided in subsection (5),
to be liable under subsection (2) in respect of the contract.
(4) If a person enters into a contract in the name of or on behalf of
a cooperative before it comes into existence and the contract is not
adopted by the cooperative within a reasonable time after it comes
into existence, that person or the other party to the contract may
apply to the Court for an order directing the cooperative to restore
to the applicant any benefit received by the cooperative under the
contract, in the form directed by the Court.
(5) Except as provided in subsection (6), whether or not a written
contract made before the coming into existence of a cooperative is
adopted by the cooperative, a party to the contract may apply to the
Court for an order
(a) fixing obligations under the contract as joint or joint an d
individual, or
(b) apportioning liability between the cooperative and a perso n
who purported to act in the name of or on behalf of the
cooperative,
and on the application the Court may make any order it thinks fit.
(6) A person who enters into a written contract in the name of or
on behalf of a cooperative before it comes into existence is not in
any event liable for damages under subsection (2) if the contract
expressly provides that the person is not to be so liable.