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Ch 8: Promoters (Typical functions (negotiation of prelim agreements, prep…

- - - - Injustice
        
        To stop this, court can create a constructive trust
    - - restore to pre-contractual position
        
        unless:
        
        it is impossible (e.g. substantially altered property)
        
        undue delay (rescission not quick enough)
        
        contract has been affirmed by the co
        
        innocent parties have acquired an interest in the property
      - May not be required if secret profit is separate from contract (Tracy v Mandalay), (Gluckstein v Barnes)
- - - - co can't enter contracts (Black v Smallwood)
    - - to protect outsiders, allows co to ratify a contract
      - Co is bound if:
        
        co is registered
        
        co ratifies the contract within a reasonable amount of time
        
        express (e.g. board passes resolution)
        
        implied (e.g. co performs obligation)
      - promoter can avoid liability if:
        
        s 132 - outsider releases promoter
        
        s 131 (1) and (2) - company enters new contract in replacement of old contract
        
        co registers and ratifies the contract in reasonable amount of time
        
        unless they fail to fulfil obligation s 131 (2) , then promoter is liable