What is the agency law principle of 'ratification'?

The principle of 'ratification' in agency law refers to the scenario where a principal affirms an act performed by an agent that was outside the bounds of the agent’s authority. When ratification occurs, the unauthorized act becomes binding on the principal as if the principal had authorized it from the beginning. This principle allows for flexibility within agency relationships, enabling principals to approve and accept actions that may have initially lacked proper authorization.

In agency relationships, an agent may sometimes act outside their conferred authority, and rather than immediately denying the action, a principal can choose to ratify it. This means the principal accepts and adopts the actions taken by the agent, potentially binding themselves to the decisions or agreements made. The key aspect of ratification is that it validates the actions of the agent retrospectively, providing the principal with the opportunity to benefit from what was done in their name.

This concept is pivotal in ensuring that principals have the ability to accept beneficent transactions, even if those transactions were not initially authorized, reinforcing the dynamic nature of agency relationships. Ratification can serve as a powerful tool for principals to maintain control and make decisions that align with their interests.