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Contracts

A New York court ruled that a church could be liable on a contract for a construction project signed by its pastor without board authorization.

Key point 6-06.2. Officers and directors must be legally authorized to act on behalf of their church. Legal authority can be express, implied, inherent, or apparent. In addition, a church can ratify the unauthorized actions of its officers or directors, but this is not required.

A New York court ruled that a church could be liable on a contract for a construction project signed by its pastor, without board authorization, because the church had ratified similar transactions in the past. A contractor sued a church for breach of contract because of its refusal to pay for remodeling work performed at the church at the request of the church's pastor. The church claimed that it was not obligated to pay the contractor because its board of trustees neither authorized the work nor empowered any individual trustee or corporate officer to authorize the work. As a result, even if an oral contract ...

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Posted:
  • January 3, 2000

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