.

Ultra Vires Doctrine

A corporation is a being of express powers; a creature of thelaw and may only exercise such powers
as the law creating it has granted. Acts performed by it in excess of its corporate powers are ultra
vires, which are generally not binding on the corporation. A person dealing with a corporation is
charged with inquiry as to corporate powers, because the corporation, being a creature of law, has
necessarily limited powers and acts done beyond those are ultra-vires.

There are three (3) types of ultra vires acts, namely:

First type :those which are outside of the express, implied or
incidentalpowers of the corporation (Sec. 43);

Second type:those which are effected by corporate representatives

whoact without authority, (even though the contract is within the
express/implied/incidental powers of the corporation they represent;

Third type:those which are contrary to laws or public policy.

The term "ultra vires" refers to an act outside or beyond corporate powers, including those that may
ostensibly be within such powers but are, by general or special laws, prohibited or declared illegal.
Twin Towers Condominium Corp. v. Court of Appeals, 398 SCRA 203 (2003).