Company Contracts and Doctrine of Ultra Vires, a Comparison of Uk and Pakistani Company Lawa
PART I
AN INTRODUCTION OF THE TERM
Chapter No.1 The Term Ultra Vires
1. Derivation:
Ultra vires is a Latin phrase. It is derived from two distinct words, i.e., ‘ultra’ and ‘vires’, which means ‘beyond’ and ‘power’ respectively[1].
2. Meaning:
Ultra vires means unauthorised; beyond the scope of power allowed or granted by a corporate charter or by law[2]. It means an act which is beyond the powers[3].
3. Definition:
“The term ultra vires simply means beyond powers or lack of power. An act is said to be ultra vires, when it is in excess of the power of the person or authority doing it[4].”
1.3.1 As per law dealing with companies:
The term ultra vires in connection with law regarding companies is defined in the following way;
“A company incorporated under the Companies Act had legal personality only for the purposes laid down in its object clause. From this it was deduced that an act done by the company outside its object clause (an ultra vires act) was null and void. Neither the company nor the other contracting party (if the ultra vires act was the entering into of a contract) could sue upon the contract, nor could the ultra vires act be ratified by the shareholders, even unanimously.”[5]
“Ultra vires describes acts attempted by a corporation that are beyond the scope of powers granted by the corporation 's Articles of Incorporation or in a clause in its by-laws; in the laws authorizing its formation, or similar founding documents. Acts attempted by a corporation that are beyond the scope of its charter are void or voidable[6].”
“It is an act of a company through which the company goes out of the way to cross its limits as stipulated in the Memorandum of Association or the Article of Association of the Company. The company is not legally bound, nor can it find anyone else, with the provisions or the results of such acts[7]”.
“By ultra vires is meant an act or transaction of a company, which, though it
AN INTRODUCTION OF THE TERM
Chapter No.1 The Term Ultra Vires
1. Derivation:
Ultra vires is a Latin phrase. It is derived from two distinct words, i.e., ‘ultra’ and ‘vires’, which means ‘beyond’ and ‘power’ respectively[1].
2. Meaning:
Ultra vires means unauthorised; beyond the scope of power allowed or granted by a corporate charter or by law[2]. It means an act which is beyond the powers[3].
3. Definition:
“The term ultra vires simply means beyond powers or lack of power. An act is said to be ultra vires, when it is in excess of the power of the person or authority doing it[4].”
1.3.1 As per law dealing with companies:
The term ultra vires in connection with law regarding companies is defined in the following way;
“A company incorporated under the Companies Act had legal personality only for the purposes laid down in its object clause. From this it was deduced that an act done by the company outside its object clause (an ultra vires act) was null and void. Neither the company nor the other contracting party (if the ultra vires act was the entering into of a contract) could sue upon the contract, nor could the ultra vires act be ratified by the shareholders, even unanimously.”[5]
“Ultra vires describes acts attempted by a corporation that are beyond the scope of powers granted by the corporation 's Articles of Incorporation or in a clause in its by-laws; in the laws authorizing its formation, or similar founding documents. Acts attempted by a corporation that are beyond the scope of its charter are void or voidable[6].”
“It is an act of a company through which the company goes out of the way to cross its limits as stipulated in the Memorandum of Association or the Article of Association of the Company. The company is not legally bound, nor can it find anyone else, with the provisions or the results of such acts[7]”.
“By ultra vires is meant an act or transaction of a company, which, though it
Bibliography: 2. Morse, Geoffrey and others, Palmer’s Company Law:Annoted Guide to the Companies Act, 2006, London: Sweet and Maxwell, 1st ed., Vol.1, 2007. 6. Hamilton, Robert W. The Law of Corporation 4th Ed, 1996 West Group Extract from JC Smith, Smith & Thomas: A Casebook on Contract, Eleventh Edition, 2000. 2. The Companies Act, 2006 (UK) 3 6. Land Acquisition Act, 1894 7 8. Representation of People Act, 1976 Websites 2. Abdul Hameed v. Punjab Bar Council, 2008 ClC 1309. At page 5 of the thesis. 3. Ashbury Ry. Carriage Company v. Richie, (1875) LR 7 HL 653. At page 3 of the thesis. 4. Dr. Lakshmanaswami Mudaliar v. LIC, (1963) 33 Com Cases 420. At page 3 of the thesis. 5. Stockport District Waterworks Co. v. Mayor etc., of Manchester, (1863) Jur. N.S.266. At page 5 of the thesis. 6. Pickering v. Stephenson, (1872), LR Eq. 340. At page 5 of the thesis. 10. Lee Behrens & Co. Ltd., (1932) 2 Ch 46: (1932) 2 Com Cases 588. At page 10 of the thesis. 11. Parke v. Daily News Ltd., (1962) 2 All ER 929: Wand M. Roith Ltd., (1967) 1 All ER 427 (Ch D). At page 10 of the thesis. 12. Horsley and Weight Ltd., (1982) 3 All ER 1045. At page 10 of the thesis. 13. Deuchar v. Gas Lights & Coke Co., (1925) A.C. 691. At page 12 of the thesis. 26. International Sales v Marcus, (1992) 13 Co Law 124. At page 30 of the thesis. 34. Nazar Abbas Jaffri v. Secy: Government of the Punjab, 2006 SCMR 606. At page 42 of the thesis. 40. Messrs Electric Lamp Manufacturers of Pakistan Ltd. v. The Government of Pakistan, 1989 PTD 42. At page 55 of the thesis. 41. Collector of Customs and others v. Sheikh Spinning Mills, 1999 SCMR 1402. At page 55 of the thesis. 44. National Engineering Services Pakistan (Pvt.) Ltd. v. Steel Mill Corporation, 2004 YLR 1696. At page 74 of the thesis. 2. Official Report, 1989, Col 1245.