Template:Ultravires capsule

Ultra vires is Latin for “beyond its powers”, a concern which crops up usually in the context of a corporation or governmental authority exceeding the powers and objects set out in its constitution or charter. It may also have some relevance to a Trust.

In that most valuable and intellectually rewarding pastime of checking a prospective combatantcounterparty’s capacity and authority, ultra vires is your principle concern should it not, after all, have the capacity to transact in your chosen kind of derivative.

These days ultra vires is a rather old fashioned notion as far as an ordinary corporation goes — in most sensible jurisdictions, the vicissitudes of the ultra vires rule for innocent, publicly spirited bystanders (like swap dealers), whose only concern is that an undertaking is prudently managing the financial exposures inherent in its business, have been largely obliterated by legislation, but it is still liable to induce butterflies in your team of legal eagles if you are dealing with a local authority.