An agent will usually act within his authority, but if the relationship with his principal is well established he may occasionally act outside the authority if he feels the principal will subsequently ratify the agent‟s action. Discuss the effects of subsequent

Effects of subsequent ratification of unauthorized act by the principal

• The principal becomes liable
• The ratification is retrospective and takes effect from the time the agent acted.
• The transaction becomes lawful (authorized).
• The agent is exempted from liability to 3^rd parties.