Question

In 200 words Discuss the principle of ratification, and in your discussion, look at any injustice caused by its operation and limitations on its availability.

Answer 1

Where agent does an act for his principal but without knowledge of authority, or where the agent exceeds the given authority, the principal is not held bound by the transaction. However, the doctrine of ratification of a contract lets the principal ratify the act of the agent if the principal desires. If he ratifies the contract, then the contract will have the same effect as if the act was originally done by the principal's authority. Agency in such a case is said to be created by ratification.

However, there are some limitations or conditions subject to this doctrine. First, the agent must contract as an agent, not as the principal himself. Second, the principal must be existence and in contractual capacity during the formation of the contract. Third, the objects of the contracts must be legal in nature. Fourth, the principal can ratify contracts which are in his capacity. Finally, ratification cannot be made to actuate a harm or damage to a third party.

Ratification must be considered a contract as a whole meaning the principal has to own both the risk and reward once he decided to ratify a contract. Injustice related to ratification can happen when it comes to the interest of the third party. If a third party enters a contract in good faith with an agent and the agent acts outside of his capacity and then finally, the principal fails to ratify the contract, the severance to the third party can be unjust. In other words, the doctrine of ratification does not provide adequate protection to the third parties entering the contract in good faith with the agent.