The Doctrine of Ratification is a legal principle in the law of agency where a person (the Principal) accepts and confirms an act done on their behalf by another person (the Agent) who, at the time of the act, had no authority to do it.
Under the Indian Contract Act, 1872 (Sections 196 to 200), ratification is essentially "ex post facto" authority—it relates back to the time the act was performed. It is summarized by the maxim: "Omnis ratihabitio retrotrahitur et mandato priori aequiparatur" (Every ratification relates back and is equivalent to prior authority).
1. Essential Requisites of a Valid Ratification
For a ratification to be legally binding and effectively bind the Principal, the following conditions must be met:
Act Done on Behalf of the Principal: The agent must have expressly acted in the name of the Principal. A person cannot ratify an act that the agent intended to do for themselves.
Existence of the Principal: The Principal must be in existence (legally) at the time the act was performed.
Example: A company cannot ratify contracts made by promoters before the company was formally incorporated (established in Kelner v. Baxter).
Full Knowledge of Facts (Section 198): No valid ratification can be made by a person whose knowledge of the facts of the case is materially defective.
Whole Transaction (Section 199): A Principal cannot ratify only the "good parts" of a transaction and reject the rest. Ratifying a part of an unauthorized act is deemed a ratification of the whole act.
Lawful Act: The act must be one that the Principal could have legally performed themselves. An illegal or ultra vires (beyond power) act cannot be ratified.
No Damage to Third Party (Section 200): Ratification cannot be used to validate an act that would have the effect of subjecting a third person to damages or terminating any right or interest of a third person.
2. Modes of Ratification
Ratification can be done in two ways:
Express Ratification: The Principal clearly states in words (oral or written) that they accept the act.
Implied Ratification: Conduct of the Principal indicates acceptance.
Example: If an agent buys goods for the Principal without authority, and the Principal subsequently sells those goods or uses them, they have impliedly ratified the purchase.
3. Effects of Ratification
Once a valid ratification takes place, it produces the following legal consequences:
Agency by Relation Back: The act is treated as if it were authorized from the very beginning. The "agent" is protected from liability to the Principal for acting without authority.
Contractual Liability: A valid contract is formed between the Principal and the third party.
Principal’s Liability: The Principal becomes liable for all acts of the agent within that transaction, including any frauds or misrepresentations committed by the agent during that specific act.
4. Decided Cases
Bolton Partners v. Lambert (1889)
Facts: An agent, without authority, bought property for the Principal. The seller (Lambert) later tried to withdraw the offer before the Principal had ratified the purchase. After the withdrawal, the Principal ratified the act.
Decision: The court held that the ratification related back to the date of the agent's act. Therefore, a binding contract existed from the start, and the seller could not withdraw their offer.
Keighley, Maxsted & Co. v. Durant (1901)
Facts: An agent was authorized to buy wheat at a certain price. He bought it at a higher price in his own name, though he secretly intended it for the Principal.
Decision: The House of Lords held that the Principal could not ratify the act because the agent did not profess to be acting for a Principal at the time of the contract.
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