LEGAL EFFECTS OF PUBLIC AUTHORITIE'S ULTRA VIRES IN CONCLUDING CONTRACTS

according to the civil code, article 663 every action accomplished out of his authority by agents among them the governmental managers is ineffective. But operating this article with respect to governmental contracts especially those which concern to act of state (act jure empirii) Creates undesirable effects and make the people distrust to the government and spoil the rights of the persons of good faith and ignorance. this problem can be solved by resorting to principle of preference of the public interest in interpretation of the governmental contracts, the theory of apparent proxy, and unity of basis of the commercial code with respect of violation their authority by the directors of the commercial companies and consequently to treat these contracts as defective.