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:
“As an example to others, and not that I care for moderation myself, it has always been my rule never to smoke when asleep, and never to refrain from smoking when awake.”
—Mark Twain [Samuel Langhorne Clemens] (1835–1910)