Q) C without any authority from K, acts as K’s agent and makes a contract with

M appointing M as K’s manager. M repudiates the contract before K ratifies it.

Later K ratifies and sues M for breach of contract. What are M’s rights?
[3marks]
A)
 When a person performs an act for someone without any
authority then the person on whose behalf the act is done may either
disown or adopt the act. If he adopts the act then the effect is same
as though the act had been carried out with his authority. This
adoption is known as ratification. In the given case, K ratifies the act
carried out by C.
 The effect of ratification is retrospective which means the
unauthorized act is converted into an authorized act from the
moment the act was done and not from the time when it was actually
ratified. In the given case, even though M renounces the contract
before it is ratified by K, M will remain bound by the contract due to
this retrospective effect. As such, M has no rights and K can sue him
for the non-performance of the contract.
 Leading case of Bolton Partners vs Lambert: the managing director
of a company, who was acting as an agent without authority
accepted a purchase offer made by the defendant. The defendant
withdrew his offer before the manager’s act was ratified by the
company. The company brought a suit against the defendant claiming
that offer once accepted cannot be revoked. The defendant argued
that since the manager acted out of his authority, the contract is
incomplete. The court rejected this argument due to ratification’s
retrospective nature.