Restatement of the Law, Agency 3rd Sec. 4 Flashcards
Ratification Defined
§ 4.01 Ratification Defined
(1) Ratification is the affirmance of a prior act done by another, whereby the act is given effect as if done by an agent acting with actual authority.
(2) A person ratifies an act by
(a) manifesting assent that the act shall affect the person’s legal relations, or
(b) conduct that justifies a reasonable assumption that the person so consents.
(3) Ratification does not occur unless
(a) the act is ratifiable as stated in § 4.03,
(b) the person ratifying has capacity as stated in § 4.04,
(c) the ratification is timely as stated in § 4.05, and
(d) the ratification encompasses the act in its entirety as stated in § 4.07.
Effect of Ratification
§ 4.02 Effect of Ratification
(1) Subject to the exceptions stated in subsection (2), ratification retroactively creates the effects of actual authority.
(2) Ratification is not effective:
(a) in favor of a person who causes it by misrepresentation or other conduct that would make a contract voidable;
(b) in favor of an agent against a principal when the principal ratifies to avoid a loss; or
(c) to diminish the rights or other interests of persons, not parties to the transaction, that were acquired in the subject matter prior to the ratification.
Acts That May Be Ratified
§ 4.03 Acts That May Be Ratified
A person may ratify an act if the actor acted or purported to act as an agent on the person’s behalf.
Capacity to Ratify
§ 4.04 Capacity to Ratify
(1) A person may ratify an act if
(a) the person existed at the time of the act, and
(b) the person had capacity as defined in § 3.04 at the time of ratifying the act.
(2) At a later time, a principal may avoid a ratification made earlier when the principal lacked capacity as defined in § 3.04.
Timing of Ratification
§ 4.05 Timing of Ratification
A ratification of a transaction is not effective unless it precedes the occurrence of circumstances that would cause the ratification to have adverse and inequitable effects on the rights of third parties. These circumstances include:
(1) any manifestation of intention to withdraw from the transaction made by the third party;
(2) any material change in circumstances that would make it inequitable to bind the third party, unless the third party chooses to be bound; and
(3) a specific time that determines whether a third party is deprived of a right or subjected to a liability.
Knowledge Requisite to Ratification
§ 4.06 Knowledge Requisite to Ratification
A person is not bound by a ratification made without knowledge of material facts involved in the original act when the person was unaware of such lack of knowledge.
No Partial Ratification
§ 4.07 No Partial Ratification
A ratification is not effective unless it encompasses the entirety of an act, contract, or other single transaction.
Estoppel to Deny Ratification
§ 4.08 Estoppel to Deny Ratification
If a person makes a manifestation that the person has ratified another’s act and the manifestation, as reasonably understood by a third party, induces the third party to make a detrimental change in position, the person may be estopped to deny the ratification.
