Previous: Agents’ authority

Ratification is the process by which a principal retrospectively authorises a specific act of his agent, which was unauthorised at the time of the act. Koenigsblatt v Sweet (1923) summarised the doctrine as being ‘equivalent to antecedent authority’ for an agent. Although, not all acts can be authorised. A principal will usually wish to ratify an act for financial gain.

Prerequisites

Ratifiable act

The first prerequisite to ratification is the requirement that the agent must have performed the unauthorised act on behalf of his principal. As such, according to Brook v Brook (1871), forgeries cannot be ratified. In principle, illegal acts are also not ratifiable, but Bedford Insurance Co v Instituto de Resseguros do Brazil [1985] notes that there are different types of illegality; if permitting ratification is not repugnant to public policy, it will be allowed.

Ascertainable principal

For a principal to ratify an act, the third party need not have know who the principal was at the time, but the principal must have been ratifiable. Only a principal may ratify, according to Jones v Hope (1880). If this were not the case, third parties would never know if they were bound by the contracts they had agreed to or not. An undisclosed principal cannot ratify as he cannot be identified, according to Keighley, Maxted & Co v Durant (1901).

Competent principal

If the principal would not have had the capacity to enter into the agent’s agreement at the time of the agreement, ratification will not be permitted...

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