When government bodies or agencies take action, the extent of their powers is determined by laws, which may include a constitution. When branches of government go beyond these defined powers, their actions can be considered ultra vires and have legal consequences. [Latin, violence or violence.] A term used in many legal expressions and maxims, such as vis injuriosa, “illegal violence”. The roots of the term come from a Latin phrase that means beyond power. This is the opposite of under the right authority – intra vires. You can also find the term in the legal profession. Companies have a variety of legal documents and policies that outline the parameters of actions allowed by each organization, its employees, and its directors. These documents may contain “statutes”. The memorandum is mainly used in Europe, but not in the United States. From a legal point of view, something that is intra vires is officially allowed, for example, when a commercial buyer makes an intra vires purchase and first completes all the relevant forms. Ultra vires stocks are all actions that are beyond the control of a company.
Ultra vires shares do not fall within the powers expressly enumerated in a charter or corporate law. This may also refer to any act expressly prohibited by the Company Charter. Ultra vires (Latin: “beyond powers”) is a Latin expression used in law to describe an act that requires legal authority but is performed without it. Its opposite, an action carried out under the competent authority, is intra vires (“within the limits of powers”). Intra vires acts can be described as “valid” and those that are ultra vires as “invalid”. The term is not appropriate with respect to acts or transactions that are not within the lawful authority of a person. Thus, the term is used in two ways: although other types of entities, such as government agencies, also take actions that are beyond the scope of their legislative powers, their actions can also be characterized as ultra vires acts. In British constitutional law, ultra vires describes patents, ordinances and other similar patents granted under the prerogatives of the Crown and contrary to laws passed by the Crown in Parliament. Almost unknown in modern times, the ultra vires acts of the crown or its servants posed a major threat to the rule of law. “Ultra vires.” Merriam-Webster.com Dictionary, Merriam-Webster, www.merriam-webster.com/dictionary/ultra%20vires.
Retrieved 14 January 2022. Several modern developments related to business start-ups have limited the likelihood of ultra vires actions. Except in the case of not-for-profit corporations (including municipal corporations), this legal doctrine is obsolete; In recent years, almost all businesses have been created to enable them to conduct legitimate activities. The U.S. Model Business Corporation Act states: “The validity of corporate actions shall not be challenged on the basis that the corporation is unable or incapable of acting.” The doctrine still has some life among non-profit organizations or state-created corporations established for a specific public purpose, such as universities or charities. In Hammersmith and Fulham London Borough Council v Hazell,[16] the House of Lords found that interest rate swaps entered into by local authorities (a popular method of circumventing legal restrictions on local authorities borrowing money at the time) were all ultra vires and void, triggering a number of satellite disputes. Legal issues related to ultra vires can arise in different contexts: Under U.S. law, the concept of ultra vires may still exist in some states in the following types of activities: Actions that violate the above guidelines can be classified as ultra vires. For example, a corporation`s articles of incorporation may describe the procedure for appointing directors to its board of directors. When board members are added or removed without following these procedures, these measures are called ultra vires. These sample phrases are automatically selected from various online information sources to reflect the current use of the word “ultra vires”.
The views expressed in the examples do not represent the views of Merriam-Webster or its editors. Send us your feedback. In administrative law, an act in the narrow or broad sense may be subject to ultra vires judicial review. Ultra vires étroit applies if an insolvency practitioner lacked substantive decision-making authority or was vitiated by procedural irregularities. Broad ultra vires applies where there is an abuse of authority (e.g., Wednesbury unreasonableness or bad faith) or failure to exercise administrative discretion (e.g., acting at the request of others or illegally applying government policy), or irrational and abuse of discretion. [11] Both doctrines may be entitled to various privileges, equitable remedies, or legal orders if satisfied. In many jurisdictions, such as Australia, legislation provides that a company has all the powers of a natural person[8] and other persons; The validity of acts rendered ultra vires is also preserved. [9] Historically, all UK companies were subject to the doctrine of ultra vires, and any act outside the objectives set out in a company`s articles of association would be ultra vires and void. [3] This result was commercially unpleasant and led to the creation of companies with extremely broad and generic purpose clauses that allowed a company to engage in all sorts of business activities. [7] In corporate law, ultra vires describes acts attempted by a corporation that go beyond the powers conferred by the purpose clause of the corporation, its articles of association, articles of association, similar instruments of incorporation or laws authorizing the incorporation of a corporation. Acts attempted by a company that do not fall within its articles of association are null and void.
The situation was changed by the 1985 Act, which largely abolished the doctrine of commercial companies. The situation is now regulated by sections 31 and 39 of the Companies Act 2006, which also severely limit the applicability of ultra vires in company law, although it can still apply to charities and a shareholder can only apply for an injunction in advance to prevent an act known as ultra vires. The Latin phrase intra vires means “within the powers” and is often used to contrast something that is ultra vires, “outside the powers.” Legally, an ultra vires action is anything someone is not allowed to do (imagine you decide to fire a colleague even if he is not his superior), as opposed to an intra vires action: “The judge has the power to make this decision, so it was an intra vires decision.” In the landmark case of Anisminic v. Foreign Compensation Commission,[12] Lord Reid is accredited to formulate the ultra vires doctrine. However, ultra vires, as well as impropriety, were mentioned much earlier by Lord Russell in the famous Kruse v Johnson case,[13] which involved challenging laws and other rules. Anisminic is best known for not depriving the courts of their jurisdiction to overturn a decision, even though a law expressly prohibits the decision from being subject to judicial review. Other cases such as Bromley LBC v. Greater London Council[14] and Council of Civil Service Unions v.
Minister of the Civil Service[15] have tried to refine the doctrine. Under constitutional law, particularly in Canada and the United States, constitutions confer various powers on federal, provincial or state governments. To go beyond these powers would be ultra vires; For example, although the Court did not use this term to amend a federal statute in United States v. Lopez on the grounds that it exceeded the constitutional authority of Congress, the Supreme Court still declared the law ultra vires. [10] Thus, in a number of cases where it has been found that bodies other than the Oireachtas have exercised their powers under primary law to promote public order, the contested primary law has been interpreted as not having the effect that a subsidiary body may exercise public order.