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Agency law

In order to ratify the principal must:

 Ratify the whole contract; a purported ratification of part will operate as a
ratification of the whole

 Ratify the contract within a reasonable time

 Communicate a sufficiently clear intention of ratifying such as refusing to return
goods purchased for him by an agent who lacked authority.

Illustration 3 – Creation of agency

KELNER v BAXTER 1866

Facts:

The promoters of a company entered into a contract on behalf of the company
before its incorporation but did not pay (a ‘promoter’ in this context meaning
someone who sets up a company).

Held:

The promoters were personally liable as the company did not exist at the time the
contract was made.

A void or illegal contract cannot be ratified.

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