Golden Enterprises, Inc., entered into a contract with Hidalgo Corporation for the sale of its mineral holdings. The transaction proved to be ultra vires. Which of the following parties may properly assert the ultra vires doctrine and why?

Question

A. Golden Enterprises to avoid performance.
B. A shareholder of Golden Enterprises to enjoin the sale.
C. Hidalgo Corporation to avoid performance.
D. Golden Enterprises to rescind the consummated sale.

Answer 1

Answer: B. A shareholder of Golden Enterprises to enjoin the sale.