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Chapter 5

Agency by ratification

If a properly appointed agent exceeds his authority, or a person having no authority
purports to act as an agent, the principal has no liability on that contract unless the
principal ‘ratifies’ the contract.

If the contract is ratified:

 Principal becomes liable and entitled under the contract

 The ratification operates retrospectively and principal is bound from the date the
contract was actually made

 Agent is relieved from liability to principal for acting beyond his authority

 No authority is given for future acts.

A principal can only ratify if each of the following conditions are met:

 The principal is in existence at the time of the agent’s act.

 The principal had the legal capacity to make the contract himself, both at the
time of the contract and at the time of ratification (see pre-incorporation
contracts in company law chapters)

 The agent, at the time of the contract, named or otherwise sufficiently identified
the principal.

 The principal is made aware of all the terms of the contract.

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