formålsbinding

Formålsbinding is a legal principle in Danish and Norwegian law by which rules, decisions, and actions must be directed toward and confined to the stated purpose of a statute, contract, or organizational charter. It serves to ensure that discretion is exercised within the bounds of the intended aim and to prevent diversion to unrelated ends.

In public administration the concept is closely related to teleological interpretation: when interpreting a law or regulation, authorities should apply it in a manner that furthers its objective and avoid substituting different aims. In private law and organizational governance, formålsbinding denotes that resources, powers, and activities are bound to the organization’s defined mission; deviations require authorization or amendment of governing documents.

Mechanisms include explicit purpose clauses, fiduciary duties requiring adherence to the purpose, and restrictions on the use of funds or assets. When formålsbinding is breached, affected parties may seek remedies such as judicial review, restitution, or removal of misusing actors.

Examples: a government grant awarded only to projects within the stated aims; a foundation’s assets used exclusively for its specified purpose; a company’s activities aligned with its corporate purpose and not diverted to unrelated endeavors.

Relation to formålsfortolkning (teleological interpretation) and proportionality, as well as to fiduciary obligations and statutory restraints. Critics note that overly strict binding can reduce administrative flexibility and lead to disputes about the scope of the purpose. See also formål, teleological interpretation, fiduciary duty.