Grant v UK Switchback Railway (1880) 40 ChD 135

Court: Court of Appeal

Facts: The company’s directors had executed a contract beyond their powers, but within the company’s scope as defined by its articles. Shareholders later ratified the contract by an ordinary resolution at a general meeting.

Held (Court of Appeal): The contract was validly ratified by the shareholders’ ordinary resolution.

Key Judicial Statement: Lindley L.J stated, “The shareholders can ratify any contract which comes within the powers of the company, and this contract clearly does.”

💡 Leveluplaw: Contracts executed by directors beyond their powers can be ratified by shareholders if the contract falls within the company’s overall scope and powers.