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Officers, Directors and Trustees - Part 1

Is a land sales contract executed by a church secretary and treasurer legally enforceable? No, concluded the Supreme Court of New Hampshire. The court observed that the officers of a corporation "have only those powers conferred on them by the bylaws of the corporation or by the resolution of the directors." Neither the bylaws of the church nor any resolution by the board vested the secretary and treasurer with authority to enter into contracts on behalf of the church. It is a good practice for churches to periodically review their charter, constitution, bylaws, and board minutes and resolutions to determine the appropriate method of authorizing and executing legal documents. Any variance from the authorized practice can lead to unwelcome legal difficulties in the future. Daniel Webster Council v. St. James Association, 553 A.2d 329 (N.H. 1987).

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Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

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Posted:
  • March 1, 1988

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