... seems to back up the statutory provision that a 3rd party should not concern himself to a great extent on express authority however the Indoor Management Rule does carry the proviso that if the transaction was unusual in terms of size or nature for the officer to have authority then the 3rd party is expected to enquire (Houghton & Co V Nothard, Lowe & Wills Ltd 1927). In this case the 3rd party must ensure they enquire into size and nature of transaction. This seems to be the main proviso. Overall the 3rd party is protected through statute and common law. This question is related to Ultra Vires contracts more specifically their validity in relation to the objects of the company. The contract between Hewitts Ltd and Toytown Council can be examined using the Companies Act 1989. The initial contract was Ultra Vires because there was no specific reference to the activity ...

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