Ultra Vires Acts

Categories: Ethics/Morals

Laws passed by the Roman emperor Ultra Vires? Acts that are just really, really...vires?

Nope. It's a Latin phrase that means "beyond the powers." It indicates activities outside the scope of an organization's authority. Basically, if a company (or other organization) steps over a line, it has committed an ultra vires act.

Don't think of these notions as illegal activities, though. A company dumping toxic waste into a town's drinking water doesn't necessarily fall under the "ultra vires" category. It has more to do with the legal capacity to act. Like, a company couldn't declare itself a sovereign state just because it owns an island off the coast of Oregon. It's not that it is doing something it shouldn't (like the toxic waste example)...it's that the thing is actually beyond the scope of the company's legal purview. A company can't negotiate a peace treaty or distribute titles of nobility. Those would be ultra vires acts.



Find other enlightening terms in Shmoop Finance Genius Bar(f)