Appellee City of Villa Rica “City” negotiated for the purchase of a right-of-way from appellant Brown Family Limited Partnership “Partnership”. A nine paragraph contract was drafted to memorialize the resulting agreement. In Paragraph 4 of the contract, the City agreed to reclaim wetlands on property owned by the Partnership and also agreed to employ a wetlands specialist to achieve that goal. The contract was executed on they City’s behalf by the mayor and two council members. Those three officers, however, did not constitute a quorum, as defined by the City’s charter. Nor was the contract presented to the city attorney for review or to the city council for approval, both of which are required by the City’s charter. Thereafter, the City upheld most of its obligations under the contract, including the payment of all money due to the Partnership. The City, however, failed to perform its obligations under Paragraph 4, regarding the reclamation of wetlands on the Partnership’s property. When the Partnership requested voluntary compliance with Paragraph 4, the City argued that the entire contract was ultra vires because it was not properly approved by the city council and was not recorded in the council’s official minutes. After determining that its claim for breach of contract was barred by sovereign immunity, the Partnership sought mandamus relief that would compel the City to validate the contract by entering it into the council’s official minutes. The superior court denied the mandamus petition, holding that because the contract was ultra vires , it was not legally binding on the City.
1. A municipality has no inherent power; it may only exercise power to the extent it has been delegated authority by the state.1 A municipality’s allocations of power from the state must be strictly construed.2 Accordingly, we have long recognized that a municipality’s ability to enter into contracts is limited.3 It is established that ” ‘a municipal corporation may bind itself by, and cannot abrogate, any contract which it has the right to make under its charter.’ “ 4 However, if a local government enters a contract in abrogation of its delegated power or in excess of its authority to enter contracts, then the contract is deemed ultra vires and void.5 The exact status of a defective contract . . . depends upon the type of limitation which the local government has ignored in making it. If the contract was imperfectly or irregularly executed, it may not necessarily be completely ineffective, as long as it was the type of contract within the power of the local government to make. But if the limitation ignored was one which placed the contract completely beyond the power or competence of the local government, then the contract will be termed ultra vires , and its status is an absolute nullity.6 Where a city charter specifically provides how a municipal contract shall be made and executed, the city may only make a contract in the method prescribed; otherwise, “the contract is invalid and unenforceable.”7 A municipality’s method of contracting, once prescribed by law or charter, is absolute and exclusive.8
