Unauthorized contracts - company secretary, Business Law and Ethics

Unauthorized Contracts:

It may sometimes happen that a company's agent, while entering into a contract on behalf of the company, exceeds his powers under the articles of association. To what extent is the company bound by the contract?

The Rule in Royal British Bank v Turquand

In Royal British Bank v Turquand (80) a company was ordered to repay a loan which its directors had borrowed on its behalf without the authority of an ordinary resolution prescribed by the articles of association. In the course of delivering his judgement Jervis, C J stated:

"The dealings with these companies are not like dealings with other partnerships, and there the parties dealing with them are bound to read the statute and the deed of settlement also. But they are not bound to do more. So therefore the party here, on reading the deed of settlement, would discover so thus not a prohibition from borrowing, other than a permission to do so on convinced conditions. Finding that the authority might be made complete by a resolution, so here he would have a right to infer the detail of a resolution authorizing that which on the face of the document appeared to be legitimately done".

Posted Date: 1/12/2013 5:12:12 AM | Location : United States







Related Discussions:- Unauthorized contracts - company secretary, Assignment Help, Ask Question on Unauthorized contracts - company secretary, Get Answer, Expert's Help, Unauthorized contracts - company secretary Discussions

Write discussion on Unauthorized contracts - company secretary
Your posts are moderated
Related Questions
Beneficial Service - Binding Contracts According to such, a contract relates service or apprenticeship is such binding on an infant - which mostly provided it is substantially

Separate meetings of each group - mergers and winding up: The first ground of objection was valid, ie. if within a single class of shareholders there are groups whose inte

LAW OF TREATIES Treaties are an important and major source of international law. It is a convenient way by which the States deliberately  enter into agreements with other State

I am an executive being transferred from my home city on the west coast to one in the Midwest. I know nothing about the city I'm moving to, but I have to buy a house there. Realtor

Define the term multiple decision makers - Strategic Voting The following lines, from Austen-Smiths' (1986) clarify the position quite succinently. He writes, 'so in elections

Supervisory Jurisdiction and Admiralty Jurisdiction Supervisory Jurisdiction However the High Court has jurisdiction under S.65 (2) of the Constitution to supervise a n

Explain the term - Policy change The role of the policy entrepreneur has several implications for our understanding of the policy process. While social scientists often look to

Explain the term- Sustainability One of the major problems identified for international policy coordination is whether the agreed outcome is sustainable. As can be seen from th

Termination of Partnership The Articles of Partnership will contain like a rule or be the regulations with regard for the termination of the partnership. Almost in the absence o

QUESTION 1 Successful Contract Administration requires the preparation of a good contract management plan. Describe the steps undertaken to prepare such a plan? QUESTION 2