Law Commons^™

Ultra Vires Transactions, James L. Parks

University of Missouri Bulletin Law Series

It used to be commonly said that if a private corporation made a contract which the legislature, creating it, expressly or impliedly prohibited it to make, all courts would be bound to treat such agreement as "illegal and therefore wholly void." This statement probably accurately expresses the orthodox attitude of courts with respect to ultra vires contracts. In some cases the same proposition, stands today, but often it has been unsatisfactory in its application, and for this reason has been relaxed in many instances to a considerable degree. The problem of giving relief upon or enforcing ultra vires agreements of …