Ratification- Definition
Ratification is the doctrine that comes into play when the agent is not authorized to act for the principal, and the third party wants to hold the principal liable for the agent’s unauthorized act. In certain situations, the law will impose liability on the principal even though the agent had no authority to do what he or she did.
Restatement (Second) of Agency § 82.
Ratification is the affirmance by a person of a prior act which did not bind him but which was done or professedly done on his account, whereby the act, as to some or all persons, is given effect as if originally authorized by him.
For the protection and benefit of the Principal; not a theory that can be asserted by a 3rd Party to hold a P liable
Affirmance- Definition
§ 83- Affirmance- Affirmance is either a manifestation of an election by one one whose account an unauthorized act has been done to treat the act as authorized, OR conduct by hi justifiable only if there were such an election.
Types of Affirmance
* express affirmation by the P
* implied affirmation through acceptance of the benefits of the transaction at a time when it is possible to decline to accept such benefits
* implied affirmation through silence or inaction- a P can’t wait forever before repudiating an unauthorized transaction; and
* implied affirmation through bringing a lawsuit to enforce the contract
Preconditions for Ratification
- an alleged agent purports to act on behalf of another (the purported principal) in some transaction with a 3rd party
- purported agent acted without authority or power and estoppel does not apply
- P existed at the time of contract and had capacity to contract; and
- at the time of the attempted ratification
- purported P must know or have reason to know all material facts; and
- 3rd party must not have indicated an intention to withdrawal from transaction
