Question: A, a servant of B, in excess of his authorized powers, purchased 5 Ekads of land on his behalf, from C. B, later by appreciating the transection, gave his approval and authorized his act. Commenting on the given problem, write down the essentials of a valid ratification.

 

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Answer

If the agent had no authority to contract on behalf of a principal or exceeded such authority as he had, the contract is not binding on the principal. The principal may, however, afterwards confirm or adopt the contract so made, and this is known as ratification. This is also known as ratification by subsequent authority, or ex-post facto agency.

 

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Essentials of valid ratification

1.       The act should be done on behalf of another person and it should be ratified by the person on whose behalf the act has been done. (Section 196)

2.       The principal should be in existence, and competent to contract when the act is done.

3.       Ratification may be expressed or implied. (Section 197)

4.       Ratification should be with full knowledge of the facts. (Section 198)

5.       Ratification should be of the whole transaction. (Section 199)

6.       Ratified acts should not be injurious to the third person. (Section 200)

7.       Ratification within a reasonable time.

State of Uttar Pradesh v. MurariLal: Only lawful acts are open to ratification. An act which is void from the very beginning cannot be ratified. The ratification must be in relation to a transaction which may be valid in it and not illegal.

 

Effect of a valid Ratification

1.       The effect of ratification is to render the contract as binding on the principal as if the agent had been properly authorized beforehand.

2.       The validity of a ratified act relates back to the time of doing it.

 

If we test the given problem on the above described principles, it becomes crystal clear that eventhough A purchased the land in excess of his authority, but the act has been subsequently authorized by his principal. Moreover, the said authorization is done with the knowledge of full facts, it was of lawful nature and not injurious for any third person.

Therefore, it will be termed as valid ratification in the eye of law.

 

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