University of Missouri Bulletin Law Series

Article Title

Ultra Vires Transactions


James L. Parks

Document Type



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 private corporations arises in connection with contracts which are either altogether executory or entirely or partially executed on one side. It will be the purpose of this article to determine, if possible, the state of the law governing in each of the situations mentioned and also to examine the legal results which follow complete performance of an ultra vires agreement by the parties thereto. It is not, however, proposed except incidentally to discuss the position of corporate shareholders or creditors, but merely to consider the rights and duties of the principals to the various transactions in controversies between them

Included in

Contracts Commons



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