This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
The effect and consequences of an ultra vires contract must next be considered. We must first consider the contract which is invalid only because it is ultra vires - that is, while beyond the power of the corporation it is not forbidden by statute, and does not violate any rules of public policy applicable to natural persons. The effect of such contract depends upon the extent of the performance thereof. The contract presented for consideration in any given case may be (1) executory on both sides; (2) performed on one side either by (a) the corporation or (b) the adversary party, or (3) performed completely on each side. As far as the contract is executory and the public corporation has received nothing of value thereunder, an ultra vires contract is of no effect. Either party may repudiate it without liability for its breach.1 Thus an executory contract
4 Kansas City v. Hanson, 60 Kan. 833; 58 Pac. 474; Barber, etc., Co. v. Hezel, 155 Mo. 391; 48 L. R. A. 285; 56 S. W. 449 (giving a history of the litigation in Missouri on this point); Barber, etc., Co. v. Ullman, 137 Mo. 543; 38 S. W. 458; and see Seaboard National Bank v. Woesten, 147 Mo. 467; 48 L. R. A. 279; 48 S. W. 939; St. Louis, etc., Co. v. Frost, 90 Mo. App. 677. Such provision is. of course, valid if under express statutory authority. La Veine v. Kansas City, 67 Kan. 239; 72 Pac. 774.
5 Barber Asphalt Paving Co. v. Goar, - Ky. - ; 73 S. W. 1106; McGlynn v. Toledo, 12 Ohio C. D. 15.
6 People v. Featherstonhaugh, 172 N. Y. 112; 60 L. R. A. 768; 64 N. E. 802.
7 Wilson v. Trenton, 61 N. J. L. 599; 68 Am. St. Rep. 714; 44 L. R. A. 540; 40 Atl. 575.
8 Inge v. Board of Public Works. 135 Ala. 187; 93 Am. St. Rep. 20; 33 So. 678.
1 McKee v. Greensburg, 160 Ind. 378; 66 N. E. 1009; Swift v. Falto keep a certain watercourse open,2 or to keep a road fenced, in return for a right of way,3 or to exempt certain realty from taxation,4 is void. Payment of a debt barred by the statute of limitations is held to be ultra vires. Mandamus will therefore be refused where the treasurer declines to pay a warrant drawn for such debt.5
 
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