Contracts, which are made before the company comes into existence, are called pre-incorporation contracts and contracts which are entered into by a public company after obtaining the certificate of incorporation but before getting the certificate to commence business are known as provisional contracts.
The company is not bound by the pre-incorporation contracts unless the company enters into a new contract after incorporation. But the provisional contracts shall be binding on the company from the date on which the company is entitled to commence business.
Pre-incorporation contracts can be enforced against the company if it is warranted by the terms of incorporation of the company and for the purposes of the company, while the provisional contracts cannot be enforced should the company go into liquidation without commencing business.
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