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:
“The principle of majority rule is the mildest form in which the force of numbers can be exercised. It is a pacific substitute for civil war in which the opposing armies are counted and the victory is awarded to the larger before any blood is shed. Except in the sacred tests of democracy and in the incantations of the orators, we hardly take the trouble to pretend that the rule of the majority is not at bottom a rule of force.”
—Walter Lippmann (1889–1974)