What is the Turquand Rule?

  • Suppose a party completes a transaction with the company only to later discover that the person representing the company lacked the authority to bind the company. The company may be forced honour the transaction if the transaction was completed in good faith by the other party.
  • The rule is based on the English case of Royal British Bank v Turquand 1856 119 ER 886 and has been accepted into South African law
Directors and Officers Liability