Corporate ultra vires doctrine has been substantially limited by modern statutes granting broad purposes. It retains force for governmental entities acting beyond statutory authority and for agents exceeding delegated power.
Third parties may be protected despite the defect.
Alternative Names:
Beyond the Powers|Ultra Vires Act
Why it Matters?
Municipal contracts exceeding statutory authority are the recurring modern application, since a contract a governmental entity lacked power to make may be void and unenforceable regardless of performance, leaving the contractor to quantum meruit at best. Verifying authority before contracting with public entities is therefore substantive diligence rather than a formality. Corporate ultra vires claims are largely obsolete.
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Frequently asked questions
What is the modern application?
Are corporate ultra vires claims still viable?
