Legal Question in Business Law in Illinois
If the Board of Directors of an organization signs a contract, can the organization rescind the contract unilaterally if their bylaws state the organization has the final say on all matters?
3 Answers from Attorneys
Possibly. The entire circumstances concerning the contract would need to be reviewed before a definitive answer can be posted.
It would depend on what is contained in the by-laws. However, normally the Board is entitled to act on behalf of the organization.
As a Franchise Attorney I can add the following. Besides the Board generally being able to act on behalf of the company, the other party to the contract will not be bound by what bylaws may say in the absence of actual knowledge. Consult with a good business or franchise attorney in your area for specific advice.
Mr. Franchise - Kevin B. Murphy, B.S., M.B.A., J.D.
Franchise Foundations, a Professional Corporation
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