Ultra Vires [uhl-truh -vahy-reez]
Adverb, adjective Law:
beyond the legal power or authority of a corporation, corporate officer, etc.
Brief Description:
Ultra vires is a Latin phrase used in law to describe an act which requires legal authority but is done without it. Its opposite, an act done under proper authority, is intra vires ("within the powers"). Acts that are intra vires may equivalently be termed "valid", and those that are ultra vires termed "invalid".
Since the powers exercised by any officer of an organization are limited by the constituting or vesting instrument (such as a memorandum of association), any act outside those limitations is ultra vires and may be challenged in the courts. This rule is applicable to all powers, express or implied, created by a contract or statute. However, whereas an incorporated firm has no liability beyond its corporate powers, neither the firm nor a third party may use ultra vires as an excuse or defense to invalidate a contract. Stockholders (shareholders) may sue the directors of a firm for recovery of losses resulting from their ultra vires acts, and each director may be personally liable.
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