doctrine of constructive notice
Ankita Gupta (83 Points)
28 March 2018
when the doctrine of constructive notice is applied on company
Ankita Gupta (83 Points)
28 March 2018
Rahul Prajapati
(Student)
(2282 Points)
Replied 28 March 2018
The doctrine of ‘constructive notice’, every person dealing or proposing to enter into a contract with the company is deemed to have constructive notice of the contents of its Memorandum and Articles.
Means Whether he actually reads them or not, it is presumed that he has read these documents and has ascertained the exact powers of the company to enter into contract, the extent to which these powers have been delegated to the directors and the limitations to such powers.
He is presumed not only to have read them, but to have understood them properly.
Consequently, if a person enters into a contract which is ultra vires the Memorandum, or beyond the authority of the directors conferred by the Articles, then the contract becomes invalid and he cannot enforce it, not-withstanding the fact that he acted in good faith and money was applied for the purposes of the company.
Rahul Prajapati
(Student)
(2282 Points)
Replied 28 March 2018
Master GSTR-9 and 9C with India's First Unique Live Course with Live practical training
CAclubindia
