Professional Documents
Culture Documents
n by
Agency
Dishant Mittal
Index
1. Meaning of Agency and Ratification
2. Section 196 of Ratification
3. Essentials for valid Ratification
4. Act done on the behalf of other
5. Principal should be in existence and
competent to contract
6. Ratification may be express or implied
7. Ratification with knowledge of facts
8. Ratification of whole transaction
9. Ratification not be injurious to third party
10. Ratification within a reasonable time
11. Effect of Ratification
Agency:-
An agency relationship has a tripartite structure. It involves the
principal, the agent and a third party. The agent acts on behalf of the
principal in relation to the third party. Consequently, an agent is said
to be a conduit pipe between the principal and the third party. In the
circumstance, the agent acts under the express or implied authority
of the principal. However, there are occasions when the agent acts
without the pre-knowledge of the principal. This places the principal
in a position to legally ratify the agent’s acts.
Ratification :-
Confirmation of an action which was not pre-approved and may not
have been authorized, usually by a principal (employer) who adopts
the acts of his/her agent (employee).
When an act has been done by one person on the behalf of another,
though without his authority or knowledge, the person on whose
behalf the act is done has the following options :-
1
Saunderson V. Griffins, (1826)
2
(1901) A.C. 240
Keighely, Maxsted & co.., it was held that they could not be made
liable, because, purported ratification by them was ineffective.
3
Ashubury Railway Carriage and Iron Co. Ltd. V. Riche, (1875).
4) Section 198. Ratification with full knowledge
of facts : According to section 198 of Indian Contract Act, no
valid ratification can be made by a person whose knowledge of
facts of the case is materially defective. The agent is expected to
disclose all the facts of the contract to the principal before the
principal can ratify the acts of the agent in relation to the
contract. In case Savery V. King, A entered into a mortgage
agreement on B's behalf. The agreement was invalid. Without
knowing this fact, B purported to ratify the transaction. It was
held that since B was not knowing about the invalidity of
agreement, the purported ratification of the same by him, was of
no effect.
Illustrations
(a) A, not being authorized thereto by B, demands, on behalf of B,
the delivery of a cattle, the property of B, from C, who is in
possession of it. This demand cannot be ratified by B, so as to
make C liable for damages for his refusal to deliver.
(b) A holds a lease from B, terminable on three months' notice. C,
an unauthorized person, gives notice of termination to A. The
notice cannot be ratified by B, so as to be binding on A.
When the principal ratifies an act, which has been done on his behalf
but without his authority or knowledge, the same effects follow as if
the act had been performed with the principal's prior authority.
The validity of the act relates back to the time of the doing of the act.
In Risbourg V. Bruckner, the act of the agent which had been done
without the principal's authority was ratified by the latter. It was held
that on ratification, valid contract between the principal and the
third person was created from the date when the agent had done
the act, and, therefore, the agent could not be made personally
liable because the agent's position had become the same as in the
case of a previously authorised act.
Bibliography
R.K Bangia, Indian Contract Act
www.businessdictionary.com
www.lawsofbusiness.com
www.getfreelegalforms.com/ratification.html 22/3/2016
R.G. Padia. Pollock & Mulla’s Indian Contract and Specific Relief
Act
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