Question 2

Hari is the Supervisor of Big Ben Bhd, a retail outlet selling designer watches. He often acted as the
Acting Manager of the outlet while the Managing Director and other senior staff were absent. His
normal duties when in such a position involved overseeing overall sales and ensuring that his own sales
staff performed well. While acting as Acting Manager, Hari purchased two diamond bracelets on behalf
of the company for RM2 million from Brilliant Bhd.

ii) According to the law of contract an agency also can be create by ratification. An agency by ratification
can be arise in any one of the following situations: 1. an agent who was duly appointed has exceed his
authority, 2. a person who has no authority to act for the principal has acted as if he has the authority.
When any one of the abovementioned situations arise, the principal can either reject or accept the
contract so made-section 149 contract act 1950 section 149 reads: where acts done by one person on
behalf of another but without his knowledge or authority, he may elect to ratify or to disown the acts. If
he ratifies them, the same effects will follow as if they had been perform by his authority.

In this case big ben bhd did not have to withdraw the contract with brilliant bhd because even though
Hari acted outside his authority, he can be ratified and the same affect will follow as if they had been
perform by his authority and no problem will be occurred.

References: Lee, M. P., & Detta, I. J. (2013). Commercial law. Shah Alam: Oxford Fajar.