Meaning of ratification as used in the law of agency

This is the adoption or affirmation by the “principal” of a contract previously entered into by another person purpoting to act on his behalf.

Ratification creates agency after the “agent” has acted. The relationship arises when the “principal” adopts or affirms the acts of the “agent.” The principals authority is backdated to the date of the transaction. By ratifying the transaction, the relationship between the principal and agent is created.

Legal requirements

  1. The “agent” must have purpoted to act for a “principal”
  2. The agent must have had a competent principal i.e. a natural or artificial person capable of being a principal.
  3. The “principal” must have had capacity to enter into the transaction when the agent did so and when he ratifies.
  4. The “principal” must have been aware of all the material facts relating to the transaction.
  5. The transaction must be capable of ratification i.e must not be illegal or void.
  6. The “principal” must ratify the transaction in its entirety.
  7. The “principal” must ratify the transaction within a reasonable time.


Business law Revision Kit

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