LAW OF

CONTRACTS

RATIFICATION
Table of Contents
1. WHAT IS RATIFICATION?.........................................................................................2
2. TYPES OF RATIFICATION.........................................................................................3
3. ESSENTIALS OF AVALID RATIFICATION.............................................................4

(1) Ratification must be by the person whom the agent professes to act. ................................ 4
(2)Ratification must be by a person competent to have authorised the transaction................... 5
(3) Ratification must be by a person existing at the date of the act ratified ............................. 5
(4) Ratification must be by a person with full knowledge of material facts, or with intent to
take the risk of any irregularity. ................................................................................................. 6
(5) Void or unlawful acts cannot be ratified. ........................................................................... 6
(6) Ratification must not be partial. ......................................................................................... 7
(7) Ratification must be within a reasonable time after the contract or the unauthorised act of
the agent. .................................................................................................................................... 7
(8) Ratification must not inure third person. ............................................................................ 7
(9) Ratification must be communicated to the other party. ...................................................... 8
4. CONCLUSION..............................................................................................................8
5. BIBLIOGRAPHY..........................................................................................................8
WHAT IS RATIFICATION?
Ratification is adopting or accepting subsequently a past act of an agent done on behalf of
another without authority. It is subsequent conformation of unauthorized acts. A person on
whose behalf an act has been done by another acting as agent, whether in excess of authority
or without authority, can affirm or ratify such act, so as to validate and make it as effectual as
if it had been done in pursuance of prior authority. This is sometimes called ex post facto
arising after event.
It is open to the principal, when he finds that the agent has exceeded his authority his
authority or has acted without authority, to disown the act, in which case it will not be
binding upon the principal, but if he chooses to confirm and ratify the act, then, the same
consequences would follow, as if it had been previously authorised by the principal.
Ratification is thus a kind of affirmation of unauthorised acts. It is thus explained in S 196 of
the Indian Contracts Act 1872
But it does not mean that the doctrine of ratification is a canopy working covertly to deprive
the ignorant and unwary of their rights. It is a substantial doctrine based on consent. It is
substance that persons competent to contract may, by an act or will, deliberately and
voluntarily assent to a contract made or done for them by others, adopt it as their own, and
that when they have done so, they will be bound by it just as though they had been parties to
it from the beginning. Just as there can be no valid contract without a meeting of minds, so
there can be no ratification except where, with an adequate knowledge of facts, one
competent to contract assents to and adopt as his own the act or agreement of another.
Subsequent ratification relates back to the date of the act ratified. Ratification of the act itself
results in agency only in respect of the act ratified though it may be used also as evidence of
already existing authority.1 Ratification operates retrospectively only; ratification purporting
to be in advance can at best create an apparent authority.2

TYPES OF RATIFICATION

Ratification may be express or implied. - Section 197 of the Indian Contract Act states:
“Ratification may be expressed or may be implied in the conduct of the person on whose
behalf the acts are done.” Express ratification by words spoken or written creates no
difficulty. But when can ratification be implied from the conduct of the parties? Ratification
may be implied from any act showing an intention to adopt the transaction, even silence or

1
Hutchings v. Nunes, (1863) 1 Moo. PC (N.S.) 243
2
Midland Bank Ltd v. Reckitt, (1933) AC 1, 18
acquiescence. Suing on a transaction may often amount to a ratification of it. Where there is a
slight excess of authority in the course of the ordinary business of the agency, and where the
principal coming to know of the agent having exceeded the authority keeps silent, it would
amount to ratification by acquiescence. Where an agent unauthorisedly made a reference to
arbitration and the principal, on coming to know of the same, kept quiet, it has been held that
there is a valid ratification.3 In Sultan Mahomed v. Mahomed Esuff,4 where the agent had
authority to borrow on land but the agent borrowed on houses and lands and the principal,
who happened to know of the same did not dissent, it was held that his conduct amounted to
ratification.
The best example for this is that even if a Government employee is not employed after
following the provisions of s 175 (3), Government of India Act, now Art 299 (1) of the
Constitution of India, the ratification of the employment by the Government can be inferred
from the payment of salaries to the employee etc.5
Ratification of a contract made by deed must be by deed and not implied.

ESSENTIALS OF A VALID
RATIFICATION

1. Ratification must be by the person whom the agent professes to

act.
The only person who can ratify is the person on whose behalf the act purports to be done. It
follows that where the agent purports to do an act for himself the principal cannot step in and
adopt the act by ratifying it. The position is different where the agent professes to act for a
principal but really intends to act for himself. Since the effect of ratification is to invest all the
persons concerned with the same rights and liabilities, as if the act has been done with
previous authority, it is essential that ratification must be by the persons, for whom the agent
professed to act. If the agent professed to act only for himself or for a third person or even for
a fictitious person, the principal cannot by ratification validate the act.
The act must have been done for and in the name of the supposed principal. It is not
necessary for the agent to name the principal but he must be identifiable. If the agent acts in
his own name and does not disclose the name of the principal, his act cannot be ratified. In
Keighley Masted & Co v. Durant6 the appellant authorised a co-merchant as agent to buy
Karachi wheat at specified rates on their joint account. Wheat was not obtained at those rates.
He bought wheat from Durant at a higher rate. He did so in the hope and confidence that his
act would be adopted by his principals, but he never mentioned the principals and contracted
in his own name. The principals approved the purchase, but, when the price of the wheat fell,

3
Saturjit v. Dulhin, (1897) SC 24 Cal. 469
4
(1930) Mad. 476 : 122 IC 501
5
Union of India v. Jyotirmoyee AIR 1967 Cal 461
6
(1901) AC 240
refused to take delivery. Durant sued the agent and the principals for breach of contract. But
the principals were held not liable. The agent, having contracted in his own name, his act was
not open to anybody’s ratification and, therefore, the purported ratification was ineffective.

2. Ratification must be by a person competent to have authorised

the transaction
If, at the time the act was done, the principal was not competent to authorise the transaction,
the principal cannot ratifying the act, subsequently, at a time when he was competent,
validate the transaction. For instance, if A unauthorisedly does an act on behalf of his
principal B, who on the date of the act was a minor, B cannot on becoming a major, ratify A’s
acts so as to validate the same. The principle is that, since ratification tantamount to prior
authority, the principal must be a person competent to have authorised the transaction at its
inception. Similarly, where an act is done by a person professing to act on behalf of an
incorporated company, which at the time did not possess powers to authorise the act, the
company cannot subsequently on acquiring those powers seek to ratify the act done by the
agent. The condition that at the time of making the contract the agent must have had a
competent principal is not satisfied where for instance the agent purported to act on behalf of
an alien enemy. A person not competent to authorise an act cannot import validity to it by
ratifying it.
Therefore, a minor cannot ratify a mortgage of his property made by his guardian for his
benefit and without the sanction of the court.7 So also, where de facto guardian of a minor
makes an acknowledgement on behalf of the latter for extending limitation, and the minor,
after attaining majority, signs another acknowledgment, such subsequent authority does not
amount to ratification.8 A guardian of a minor can ratify a lease on his behalf.
How can a major validly adopt to a contract entered by him during his minority?
For a valid adoption by a major, of a transaction entered into during his minority, the major
must, after he has full knowledge of the nature and effect of the transaction, make some
promise or do some other acts to show an intentional acknowledgement of his liability for the
act done on his behalf during his minority.9
A contract on behalf of a minor cannot be ratified, the contract being void in India. An alien
enemy cannot ratify.

3. Ratification must be by a person existing at the date of the act

ratified
Ratification can only be by a person ascertained at the time of the act done by a person in
existence either actually or in contemplation of law. It is enough if the principal can be
ascertained.

7
Gunduchi v. Balaram 193 IC 196, AIR 1940 Pat 661
8
Tukaram Ramji Shendre v. Madhorao manaji Bhange (1947) ILR Nag 710
9
ibid
In the case of a contract, made on behalf of a company projected but not yet formed, the
contract cannot be ratified by the company upon its formation. If the promoters of a company
enter into a contract on its behalf at a time when it is not yet incorporated, such promoters are
personally liable for obligations they create, for the simple reason that the principle has no
legal existence. Any subsequent ratification, in order to be effective, can only be made by an
authority that was in existence on the day the transaction was entered into, provided also that
the authority was competent to ratify it.10

4. Ratification must be by a person with full knowledge of material

facts, or with intent to take the risk of any irregularity.
No valid ratification can be made by a person whose knowledge of the facts of the case is
materially defective. This is clearly enunciated in s 198 of the Indian Contracts Act.
Where the principal has adopted or ratified the contract of an agent, but without knowledge of
the irregularity or ratified the contract of an agent, he will not be bound by such contract. The
principal must have full knowledge of all the material circumstances in which the act was
done. In such a case, the principal may be liable even if he has no knowledge of the legal
effect of the transaction or act ratified. So also he may be liable where he has no knowledge
of collateral matters affecting the nature of the act as where A purchases a chattel on behalf of
B from C who has no right to sell the same and B ratifies A’s act, in which case B will be
guilty of conversion.11
Where the supposed ratification relates to acts to which there is no pretence of any prior
authority, as in other cases where it not a question merely of excess of authority, full
knowledge of the facts and unequivocal adoption after such knowledge must be proved, or, in
the alternative, the circumstances of the alleged ratification must be such as to warrant the
clear inference that the principal was adopting the supposed agent’s acts whatever they were,
or however culpable they were. There can be no ratification without the knowledge of all
material facts. Due to the passivity of a non-referring partner the award does not become
binding on him.

5. Void or unlawful acts cannot be ratified.

Lawful and unlawful acts can be ratified but no void acts, as in the case of Brook v. Hook 12
were it was held that a forged signature made by the agent on the behalf of the principal
cannot be ratified as forgery is an unlawful act and it cannot be any way ratified. In
Greenwood v. Martin’s Bank13, a wife repeatedly forged her husband’s signature on the
cheques and drew out money from his account, applying it to her own use. When the husband
became aware of this, the wife persuaded him to say nothing and kept silent for eight months.
When finally he disclosed the forgeries to the bank, the wife committed suicide. Could the
husband recover from the bank the sums paid out to the wife? The House of Lords held the
husband not entitled to this recovery, but not because of ratification or adoption but he was
stopped. Three arguments have been advanced why ratification cannot be applied here.
Firstly wife is not an agent of the husband, secondly forged instrument being a void act

10
Mohamed Taquiuiddin v. Gulam Mohamed Abdul Hasan AIR 1960 AP 340
11
Hilberry v. Hatton, (1864) 2 H&C 822
12
(1871) LR 6 Ex 89
13
(1932) All ER Rep 318
cannot be nullified and finally ratification of it would stifle the criminal prosecutions of
forgers which are against public policy.
If a contract cannot lawfully be made at all, or can be made only upto certain statutory
conditions, which have not complied with, it cannot be rendered valid by subsequent
ratification. No amount of ratification can validate a void or illegal act.

6. Ratification must not be partial.

Ratification must be of the entire transaction and cannot be limited to one portion of it. It is
not open to the principal to ratify a part and refuse to accept another part of an integral
whole.1 In English law, ratification of part operates as a ratification of the whole. The
principal cannot select such provisions only as may operate to his advantage. If an act is
adopted, it will be held to have been adopted throughout. On this principle, it is open to the
principal to select one of several transactions and claim the profits without bringing into
account the other transactions. Where an agent unauthorisedly purchased thirty bonds, it
would not be open to the principal to ratify the purchase of twenty-two of them without
ratifying the purchase of the other eight bonds.
So s 199 of the Indian Contracts Act provides that the purported principal should either
disown or ratify the original act or contract of the purporting agent in whole. He cannot
accept only a part of an act or contract and repudiate the rest as unauthorised. He cannot avail
himself of it, so far as it is advantageous to him, and reject it as to the residue. He cannot
appropriate the benefit and repudiate the obligations or burdens. An agent’s act must be
adopted cum onere or not at all. The principal thus cannot take undue benefit by ratifying
only those act or part of the contract which is beneficial to him.

7. Ratification must be within a reasonable time after the contract

or the unauthorised act of the agent.
Ratification to be effective, must be made either within a period fixed by the nature of the
particular case, or within a reasonable time, after which an act cannot be ratified to the
prejudice of a third person. Ratification cannot be made so as to divest persons, not parties to
the contract so ratified, of their rights, or otherwise prejudicially to affect those rights, where
such rights have vested prior to the purported ratification. In Doe d Mann v. Walters14 it was
held that an unauthorised notice to quit can only be ratified by the landlord within the period
for giving notice.
Ratification must be done before the contract is commenced to be performed by the other
contracting party. Again where it is essential to the validity of any act that it should be done
within certain time, the act cannot be ratified after the expiration of the time fixed.
Ratification must be at a time when the principal might lawfully have done the act himself.

8. Ratification must not inure third person.

Ratification cannot be made so as to subject third persons to damages or to terminate the
rights or interests of third persons or so as to divest or prejudice the proprietary rights of third

14
(1830) 10 B & C 626
persons. Ratification, to make an act rightful which otherwise would be wrongful, must be
made at a time when the principal could lawfully have done the act himself. Where the rights
of third parties are affected the principal’s ratification of the agent’s act cannot validate the
act, which was without any authority at its inception.
In Common law system there had been confusion with regard to this principle. In Bolton
Partners v. Lambert15, a third party made an offer to X’s agent which the agent, without
authority, accepted on behalf of X. The third party later purported to revoke his offer. Later
still, X ratified his agent’s acceptance. It was held that notwithstanding the third party’s
attempt at revocation, he was bound by the contract with X. But this decision had been
doubted in later case Fleming v. Bank of New Zealand16 were Lord Lindley said that it would
be appropriate if the decision in Bolton’s case17 be reconsidered. But, under the Indian
Contract Act, such a case presents no difficulty, for by the terms of Sec. 200, there could be
no ratification, so as to impose a liability upon third parties. S 200 of the Act acts as an
exception to the general rule, namely, that ratification in law is equivalent to previous
authority.

9. Ratification must be communicated to the other party.

An express ratification, within the meaning of the sections mentioned above, cannot become
complete until it is communicated to the other party, for till then, it is liable to be revoked till
such communication is effected. This principal was held in the decision of the case
Rajagopalacharyalu v. Secretary of State 18. But it is not essential that ratification must be
communicated to the third party, for subsequent action may show approbation of the act or
conduct. Thus if it is clearly evident from the act of the principal that the he had ratified his
agent’s unauthorised act, there is not any need for communication of ratification to the third
party, else it is most necessary for a valid ratification.

CONCLUSION

The amount of evidence required to establish ratification must differ according to the
circumstances of each case, and according to whether ratification is alleged to be express or
implied in the conduct of the person on whose behalf the act is done. Thus, in case of an
agent exceeding his authority, ratification may be implied from the mere silence or
acquiescence of the principal. Ratification, once deliberately made, upon full knowledge of
all material circumstances, becomes at once obligatory and cannot, afterwards, be revoked or
recalled, and ratification by a long course of conduct is not less effective, than a ratification
by a formal declaration.

15
(1889) 41 Ch D 295
16
(1900) AC 577
17
Supra n 14
18
ILR 38 Mad 997
BIBLIOGRAPHY
 Chitti on Contract Law, 12th edn., The Common Law Library, Vol I.
 Venkoba Rao, Law of Agency, 3rd edn.,( Ed prof SC Srivastava), Butterworths India,
2001
 Avtar Singh, Contract & Specific Relief,10th Edn., Eastern Book Company.
 T.S Venkatesa Iyer, The Law of Contracts & Tenders, 10th Edn, S. Gogia &
Company, Vol I.