Ashbury Railway Carriage and Iron Co Ltd v Riche
1875 · (1875) LR 7 HL 653
Posted By lanbuk.com
- Facts
- The company's objects were to make and sell railway carriages and equipment. The directors agreed to finance the construction of a railway in Belgium.
- Issue
- Was the contract binding, and could the members ratify it?
- Held
- The contract was and void. Not even the unanimous members could ratify it.
- Principle
- At common law an act outside the objects in the memorandum is void.
- Why it matters
- Section 36 of the Act now stops such acts being invalid for that reason alone and protects good faith outsiders.
Words and Latin in this note
- Ultra vires
- Beyond the powers: an act or rule made by a body that the law did not give it the power to make, so it is invalid. Open the note.
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