ultra vires acts
Acts that are beyond the powers conferred upon a corporation by its charter
or by the laws of its state of incorporation. Corporate directors are not only
liable for their own ultra vires acts but
can also be held liable for ultra vires
acts authorized by the board as a whole. For example, if a corporation's charter
bans loans to directors and officers, the granting of such a loan by the board
would constitute an ultra vires act, for
which all board members could be held legally liable. Coverage for
ultra vires acts are excluded by directors
and officers liability policies if they are considered to have been dishonest,
fraudulent, malicious, or if such acts violate criminal statutes.
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