Description of the legal term Ratification:
Ratification in British legal context refers to the act where a person (the principal) acknowledges and gives formal approval to an act performed on their behalf by another person (the agent), which might be initially unauthorized. In essence, it’s a retrospective consent which validates actions that were formerly without the requisite authority.
The doctrine of ratification has its roots in agency law, which is a critical component of contract and commercial law. It operates on the legal presumption that an agent is acting on behalf of a principal with the principal’s authorization, either express or implied. However, there are circumstances where an agent could act outside of their authority or where an individual could purport to act as an agent without having been given authority in the first place. If the principal accepts the act retrospectively, this constitutes ratification, and the actions of the agent are deemed to have been authorized from the outset.
An essential aspect of ratification is that it must be of the entire act. A principal cannot cherry-pick which parts of the agent’s actions to ratify; it is an all-or-nothing decision. Moreover, the principal must have been capable of authorizing the act at the time it was performed, and still capable at the time of ratification. Furthermore, the principal must ratify the act in its entirety, knowing all the material facts of the transaction.
Another important condition is that ratification must not prejudice third parties. If a purported ratification would adversely affect the rights of a third party who has relied on the situation created by the unauthorized act, it would generally be deemed ineffective.
There are time constraints associated with ratification as well. If too much time passes, the opportunity to ratify may be lost, due to factors such as statute of limitations, laches, or the acquired rights of third parties. This aspect underscores ratification as a concept embedded within larger legal principles including equity and fairness.
Legal context in which the term Ratification may be used:
An example of ratification can be found in a business setting. Imagine a junior employee at a corporation negotiates a contract with a supplier to purchase resources at a significantly lower cost than usual. The employee does not have the authority to make such a deal, and the supplier is unaware of this fact. When the senior management learns of this unauthorized transaction, they may choose to ratify the contract, thus binding the corporation to the terms agreed upon by the junior employee and the supplier. Although initially unauthorized, the contract is validated by the subsequent approval by the corporation’s senior management, and the parties are obligated to perform under the contract just as if the employee had had the authority from the beginning.
Another context could be seen in the political arena. If a diplomat from the UK negotiates a treaty without the full scope of authority from the government, the treaty is not automatically binding. Once the government reviews the terms and decides that they are favorable, it may ratify the treaty, thereby giving it full force and effect as if the diplomat had had proper authority at the time of negotiation. Should the government decide against ratification, the treaty would have no effect, reaffirming the principle that elements of ratification include complete approval and knowledge of the deal.
The doctrine is a bridge between the actual authority and good faith actions, and it maintains the equilibrium between the sometimes-divergent interests of principals, agents, and third parties. It provides principals with the opportunity to validate beneficial transactions, even if those were initiated beyond the scope of an agent’s authority, while also protecting third parties through its inherent limitations. This balance exemplifies the adaptability and nuanced application of legal principles in British jurisprudence, and it underscores the relevance of understanding both the power and the constraints of such a doctrine in the realm of law.