Agency by Ratification
1. Definition
Agency by Ratification occurs when a person (the principal) approves and adopts an act done on their behalf by a person who was not originally authorized to act as their agent.
In simple words: Someone acts as your agent without permission, and later you approve it. That approval makes the act valid.
Legal Basis: Section 196 of the Indian Contract Act, 1872.
2. Key Features
Prior authority not required:
The person acting as agent initially had no authority from the principal.
Principal’s consent:
The principal must ratify the act to make it legally valid.
Timing:
Ratification must happen after the act is done, not before.
Knowledge:
The principal must be fully aware of all material facts when ratifying.
Effect:
Once ratified, the act is treated as if the agent had authority from the beginning.
3. Conditions for Valid Ratification
According to the Indian Contract Act, Section 196, ratification is valid only if:
The person who acted purportedly as an agent did so on behalf of the principal.
The principal was capable of entering into a contract at the time of the act.
The act was legal and not void or illegal.
The principal knows all the material facts of the act.
Ratification is done within a reasonable time.
4. Distinction from Regular Agency
| Feature | Regular Agency | Agency by Ratification |
|---|---|---|
| Authority | Agent has prior authority from principal | Agent has no prior authority initially |
| Validity of act | Act is valid from the beginning | Act becomes valid only after ratification |
| Consent timing | Before or at the time of act | After the act is done |
| Principal’s liability | Always liable | Liable only after ratification |
5. Examples
A person sells goods on behalf of someone without their permission. Later, the owner approves the sale. This is agency by ratification.
A manager signs a contract on behalf of a company without authority. The company later accepts the contract, making it valid.
6. Case Law Examples
Bolton v. Jones (1857)
A person acted as an agent without authority. The principal ratified the act, and the court held that the contract became valid from the beginning.
Rogers v. Hastie (1859)
If the principal does not know material facts, ratification is invalid.
7. Important Points to Remember
Ratification cannot make an illegal act legal.
The principal can accept or reject the act.
Once ratified, the agent is considered lawfully authorized from the start.
Ratification can be express (written/oral) or implied (by accepting benefits of the act).
✅ Summary:
Agency by Ratification allows an unauthorized act to be validated retrospectively if the principal approves it. It’s a way to legitimize acts done without prior consent.
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