What happens if the third party dies or becomes mentally incompetent before the principal ratifies the contract?

When considering the situation where a third party dies or becomes mentally incompetent before the principal ratifies a contract, it is important to understand the principle of ratification in agency law. Ratification occurs when a principal agrees to a contract made by an agent without authority, thereby giving the contract legal effect as if the agent had authority from the beginning.

If the third party dies or becomes mentally incompetent prior to the ratification, then the opportunity for the principal to ratify the agreement effectively vanishes. This is because the legal capacity required to enter into a contract is no longer present in the third party. A contract must involve parties who are legally able to contract, and the death or incompetence of the third party means that they cannot provide consent or agree to the terms of the contract.

Consequently, since the third party's status prevents them from being part of the contractual agreement, the ratification by the principal cannot take place, rendering the contract ineffective. Thus, no effective ratification occurs under these circumstances.