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.
Performance by the adversary party usually gives something of value to the corporation as the result of such performance, but it leaves the ultra vires part of the contract executory. Accordingly even if the corporation has received something of value under the contract, it is not thereby estopped from alleging its lack of capacity in order to avoid liability.1 Thus if a contract is made in excess of the statutory limitation without the assent of three-fifths of the voters2 performance by the adversary party does not estop the municipality from alleging ultra vires. A covenant by a city in consideration of a conveyance to it of a strip of land, whereby it agrees to leave a street open for its whole width, is ultra vires and void.3