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Validation of contracts with local authorities in certain cases.
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3.—(1) Whenever a body of persons, who are not lawfully constituted as a local authority but are acting as or purporting to be such local authority, enters, in purported exercise of the statutory powers of such local authority, into a contract with another person (in this sub-section referred to as the contractor), whether for the execution of works, the sale (voluntarily or compulsorily) of land, chattels, or other property, or the doing of any other thing by the contractor for or to such body of persons, and the contractor, in good faith and without notice that such body of persons are not lawfully constituted as such local authority, performs his part of such contract, the following provisions shall have effect, that is to say:—
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(a) such body of persons shall be deemed, for the purposes of such contract, to have been lawfully constituted as such local authority, and accordingly such local authority shall be liable under such contract to the same extent (if any) as such local authority would have been so liable if such body of persons had in fact been lawfully constituted as such local authority;
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(b) such contract shall be enforceable against such local authority by the contractor and persons claiming through or under him to the same extent (if any) as such contract would have been so enforceable if such body of persons had in fact been lawfully constituted as such local authority;
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(c) such contract shall not be invalid or capable of being questioned on the ground that such body of persons were not lawfully constituted as such local authority.
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(2) Whenever a local authority enters, or is deemed by the foregoing sub-section of this section to have entered, in purported exercise of its statutory powers, into a contract with another person (in this sub-section referred to as the contractor), whether for the execution of works, the sale (voluntarily or compulsorily) of land, chattels, or other property, or the doing of any other thing by the contractor for or to such local authority, and the contractor in good faith performs his part of such contract, the following provisions shall have effect, that is to say:—
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(a) such contract shall not be invalidated or questioned on account of any illegality or irregularity in the constitution of such local authority or the election of any of the members thereof;
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(b) the contractor shall not be concerned to inquire whether the making of such contract is or is not within the statutory powers of such local authority;
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(c) unless the contractor had notice that the making of such contract was not within the statutory powers of such local authority, the contractor and persons claiming through or under him shall not be precluded from enforcing such contract against such local authority by reason merely of the fact (if it exists) that such contract was not within the statutory powers of such local authority;
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(d) the contractor shall not be concerned to inquire whether any meeting of such local authority was or was not properly convened or constituted, or whether any particular notice to the members of such local authority was or was not duly given, or whether the proceedings at any meeting of such local authority were or were not legal and regular;
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(e) where such local authority could not lawfully make such contract without the sanction or the consent of the Minister, and such sanction or consent (as the case may be) was given or purported to be given by the Minister, the contractor shall not be concerned to inquire whether any statutory condition precedent to the giving of such sanction or consent was or was not duly complied with, and the contractor shall not be prejudiced or affected by the fact (if it exists) that any such condition precedent was not complied with by the person (whether the Minister, such local authority, or any other person) charged with the duty of complying therewith.
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(3) This section shall be deemed to have come into operation on and to have had effect as on and from the 6th day of December, 1922, and shall accordingly apply and be deemed always to have applied to contracts entered into after that date and before the passing of this Act (whether fully executed before or in course of execution at such passing) as well as to contracts entered into after the passing of this Act.
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