Chesterfield Borough Council has been operating in breach of its own constitution for years, according to the Liberal Democrats.
Borough councillor Ed Fordham said the authority had broken its own legal rules for the last four years by not properly agreeing a document, called the scheme of delegation, at its annual business meeting.
A council spokesperson said its constitution - which includes the scheme of delegation - was subject to 'regular review'.
Coun Fordham, who represents the Brockwell ward for the Lib Dems, said: "The scheme of delegation is the document that hands power from councillors to officers - this affects matters such as planning and licensing, negotiations of contracts and legal agreements, all planning applications and the variations of applications.
"In fact there are few aspects of the council’s work that aren't affected by this document.
"I believe that by failing to get this properly agreed at the annual business meeting of the council each year for the last four years, Chesterfield Borough Council had been in breach of its own legal rules for the last four years.
"The consequence is that Chesterfield Borough Council may face significant legal challenge from anyone unhappy at any of the decisions that officers have made."
Coun Fordham said he raised the issue at a council meeting last week and added: "What was shocking was that Labour councillors seemed to deny that they had done anything wrong."
A council spokesperson said: "I can confirm that the council’s scheme of delegation was considered and approved at the council’s annual business meeting on May 13.
"The council's constitution, which includes the scheme of delegation, is subject to regular review by the council’s standards and audit committee and at meetings of full council.
"Council last approved the scheme of delegation at its meeting in October 2018 when the report and recommendations received full cross party support, including from the Liberal Democrat members serving on the council at that time."