Ratification

What is Ratification?

**Ratification** is the legal act by which a person (the principal) approves and adopts an act that was done on their behalf by another person (the agent) without prior authority or in excess of the authority granted. When ratified, the act is treated as if it had been authorised from the very beginning. Ratification relates back to the date of the original act, giving it retrospective validity.

In everyday terms, if your friend books a hotel room in your name without asking you, and you later say "that's fine, I accept the booking," you have ratified your friend's act. The booking is now treated as if you had authorised it from the start, and you are bound by it.

Legal Framework in India

Key Legal Provisions

- **Section 196 of the Indian Contract Act, 1872:** *"Where acts are done by one person on behalf of another, but without his knowledge or authority, he may elect to ratify or to disown such acts. If he ratifies them, the same effects will follow as if they had been performed by his authority."*

- **Section 197:** Ratification may be express or implied. Express ratification is a clear statement of approval. Implied ratification occurs when the principal's conduct demonstrates acceptance — for example, accepting the benefits of the unauthorised transaction.

- **Section 198:** Ratification must be of the **entire act** — the principal cannot ratify the beneficial parts and reject the disadvantageous parts. This is the principle of **ratification in toto**.

- **Section 199:** The principal can ratify an act only if they had the **competence** to authorise the act at the time it was done. A principal who is a minor, of unsound mind, or otherwise legally incapable cannot ratify.

- **Section 200:** Ratification does not bind the principal when it would cause damage to the rights of a third person that existed before the ratification.

The Doctrine of Relation Back

A key principle of ratification is that it **relates back** to the date of the original act. Once ratified, the act is treated as having been authorised from inception. The Supreme Court in **Bolton Partners v. Lambert (1889)** (an English case followed in India) established that ratification is equivalent to prior authority — *omnis ratihabitio retrotrahitur et mandato priori aequiparatur*.

This means that if an agent enters into a contract on behalf of the principal without authority on January 1, and the principal ratifies on March 1, the contract is treated as valid from January 1.

Conditions for Valid Ratification

Indian courts have laid down the following conditions that must be met for a valid ratification:

1. The Agent Must Have Acted on Behalf of the Principal

The agent must have purported to act for the principal — not in their own name. If the agent acted in their own name without disclosing the principal, the principal cannot later ratify the act. This was affirmed in **Keighley, Maxsted & Co v. Durant (1901)**.

2. The Principal Must Have Been in Existence

The principal must have been in existence at the time the act was done. This is particularly relevant for companies — a company cannot ratify an act done on its behalf before it was incorporated. The **pre-incorporation contracts** of a company cannot be ratified after incorporation; they must be entered into afresh.

3. The Principal Must Have Competence

Under Section 199, the principal must have had the legal capacity to authorise the act at the time it was performed. A person who was a minor or of unsound mind at the relevant time cannot subsequently ratify.

4. Full Knowledge of Material Facts

The principal must ratify with full knowledge of all material facts relating to the transaction. Ratification based on incomplete or incorrect information may be set aside.

5. Ratification Must Be Timely

Ratification must be made within a reasonable time. If the principal delays unreasonably, the right to ratify may be lost, particularly if third-party rights would be prejudiced by the delay.

6. The Act Must Be Lawful

An act that is void or illegal cannot be ratified. Ratification can only validate an act that the principal could have lawfully authorised.

When Does Ratification Matter?

Agency and Business

In commercial settings, agents frequently act beyond their authority — negotiating terms the principal did not authorise, signing contracts with different conditions, or entering into new agreements. Ratification provides a mechanism to validate these acts without requiring them to be redone.

Partnership

Under the **Indian Partnership Act, 1932** (Section 22), partners can ratify acts done by a fellow partner beyond the scope of their authority. Once ratified, the act binds the firm.

Government and Public Bodies

Government officers and statutory authorities sometimes act without proper authorisation or in excess of their powers. Ratification by the competent authority can validate such acts. However, the Supreme Court in **State of Punjab v. Hari Kishan Sharma (1966)** held that ratification of an ultra vires act by a statutory body is not always permissible — the body must have had the power to do the act in the first place.

Election Law

Under the **Representation of the People Act, 1951**, acts done by an election agent can be ratified by the candidate, making the candidate responsible for those acts.

Ratification vs Estoppel

| Feature | Ratification | Estoppel |

|---|---|---|

| Nature | Voluntary adoption of an unauthorised act | Prevention from denying a representation |

| Effect | Relates back to the date of the original act | Operates from the date of reliance |

| Requirement | Principal must have been identifiable | Representation must have been acted upon |

| Application | Agency law | Broader application across law |

Practical Significance

- **Retrospective effect:** Ratification validates the act from its inception, which can have significant consequences for the timing of rights and obligations.

- **Cannot prejudice third parties:** Section 200 protects third parties whose rights existed before ratification. The principal cannot use ratification to override pre-existing rights.

- **Whole act:** The principal must accept the entire transaction — they cannot cherry-pick favourable aspects and reject unfavourable ones.

- **Implied ratification is common:** In practice, ratification often occurs impliedly through conduct — accepting goods delivered under an unauthorised contract, receiving payment, or retaining benefits.

- **Corporate law implications:** Since pre-incorporation contracts cannot be ratified, promoters of companies must ensure that contracts entered into before incorporation are formally adopted by the company after it comes into existence.

Frequently Asked Questions

Can an act done without authority be ratified after the other party has withdrawn?

This is a debated point. Under the English rule in **Bolton Partners v. Lambert**, ratification is valid even if the third party purported to withdraw before ratification. However, this rule has been criticised and has not been universally followed. Indian courts have generally adopted the Bolton Partners principle, but Section 200 of the Indian Contract Act provides protection against ratification that would injure third-party rights. If the withdrawal created vested rights in the third party, ratification may not override them.

Can a minor ratify a contract after attaining majority?

No. Under Section 199 of the Indian Contract Act, the principal must have been competent to authorise the act at the time it was done. Since a minor's contract is void ab initio under Indian law (as held in **Mohori Bibee v. Dharmodas Ghose (1903)**), and the minor lacked capacity at the time the act was performed, ratification after attaining majority does not validate the original act. The person must enter into a fresh contract upon attaining majority.

What is the difference between ratification and novation?

**Ratification** is the approval of an existing unauthorised act — it relates back to the original date and does not create a new contract. **Novation** under Section 62 of the Indian Contract Act is the substitution of an existing contract with a new one, either by changing the parties or the terms. Novation extinguishes the old contract and creates a new one. Ratification preserves the original act and gives it retrospective authority.