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Percy Limited has recently formed a contract with a third party, which is restricted by the objects in the company’s constitution.
Which of the following statements is/are correct?
A
The validity of the act cannot be questioned on the grounds of lack of capacity by reason of
anything in the company’s constitution.B The act may be restrained by the members of Percy Ltd.
C The act may be enforced by the third party.
D The directors have a duty to observe any limitation on their powers flowing from the company’s constitution.
Answer is given A,C&D B is incorrect since members can only act before the contract is signed
My doubt is why is b not the answer and could u plz explain why A & C are the correct answers
The law actually states “The validity of the act cannot be questioned on the grounds of lack of capacity by reason of anything in the company’s constitution.”
It didn’t used to say that but CA 1985 (I think) changed it to read as above
Why is option ‘d’ not correct? Good question! One of the statutory duties as outlined in the course notes and lectures is that ‘directors should act within their powers’ so I can’t throw any light on to the reason why ‘d’ is stated as incorrect
Does BPP (I assume) not give their reasoning?
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