The indoor management rule means that a third party who enters into a contract with a corporation, is obliged to make an inquiry into the internal management of the corporation to ensure that the contract, when signed, would be a properly authorized contract.

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The indoor management rule, also known as the "Turquand's Rule," states that third parties dealing with a corporation are entitled to assume that internal company rules are complied with, and they are not obliged to inquire into the internal management of the corporation.

The Indoor Management Rule Means That a Third Party Who