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:
“Therefore doth heaven divide
The state of man in divers functions,
Setting endeavor in continual motion,
To which is fixed, as an aim or butt,
Obedience; for so work the honeybees,
Creatures that by a rule in nature teach
The act of order to a peopled kingdom.”
—William Shakespeare (1564–1616)