The Rule in Turquand's Case
The rule in Turquand's case does not enable a third party to hold the company to an unauthorized transaction per se. It allows a third party to assume that a transaction which is within the authority of the directors has been properly authorized, but it requires the third party to establish the fact of authority, actual or apparent, in the first place.
Read more about this topic: Apparent Authority
Famous quotes containing the word rule:
“It seems to be a rule of wisdom never to rely on your memory alone, scarcely even in acts of pure memory, but to bring the past for judgment into the thousand-eyed present, and live ever in a new day.”
—Ralph Waldo Emerson (1803–1882)