- This topic has 5 replies, 2 voices, and was last updated 7 years ago by
.
- Posts
ca 2006 states that the powerof the directors to bind the company or to authorize another to bind company , will not be limited by anything in the companys constitutions, provided the other party is acting in good faith
mike what is other party and explain the whole statementYou bind a company by entering into a contract.
According to the old saying, it takes two to tango
It takes two to enter into a contract.
Now one of them is the company (via the director)
Who do you think is “the other party”?
When a director enters into a contract on behalf of a company, even though he may be acting ultra vires, the contract will be enforceable by the third party so long as the third party did not know that the director was acting without authority
the other party is customer supplier or other party to which company is dealing through director
mike if director goes beyond his power which is given to him by article then he is liable to company but that contract which he made to other party on behalf of company is still binding on company is it correct
- You must be logged in to reply to this topic.