Ratification of contract(Sec. 196 – 200) 

Introduction 

Rights of person as to acts done for him without his authority – Effects of Ratification (Section- 196)

When a person (agent) acts on the behalf of another person (principal) without any authority to do so, then such person for who’s behalf the work has been done has the right to either ratify or disown his act. Under this section, the act says that when a person acts on the behalf of another without the authority to do so then another person can either approve his act or can disown his act. This is ratification.

If the person ratifies the act which was done on his behalf, then such act will be considered to be performed with his authority, but if the person disowns the act done by another person on his behalf, then the other person will be held liable for it.

This whole act depends on a person who can either approve or disown the act done by the other person on behalf of him with no authority to do so. This principle is basically connected with the voidable contracts but not with the void contracts because these contracts do not have the capacity to legally enforce them.

For ratification the Agent who’s doing the act on the behalf of the principal should do it for the principal only and not for himself. If he has some personal profit or benefits in his act then it will not come under the act of ratification.

For Example:

Agents sells the goods of the principal to the third party without the authority to do so. The third party pays for it. The agent tells the principal of his unauthorised act, Now the Principal has the right that either he can ratify the agents act or he can disown it. 

DIFFERENCE BETWEEN CONSENT AND RATIFICATION 

Ratification is totally different from consent as consent allows the parties to complete their work on its bases by proceedings, but in ratification one party is generally unaware of facts and time of the work which is voidable. Consent is taken basically when action of a person is still in process but in ratification the action or work has already been done when ratification was made.

Ratification may be expressed or implied (Section – 197) 

Ratification can either be in expressed or implied form. In expressed ratification it is essential that there should be a communication with the other party whereas, in implied ratification it is not necessary that there should be a communication with another party. 

For Example: B lends some money to A and a give it to C on interest. Now if B accept the interest from C. That is called implied ratification.

M sells goods of N to O without any authority to do so. Then, N accepts the money from O after 1 month. That is called expressed ratification. 

Acts of public servant

These can be ratified the same way it is done for the private transactions through any simple declaration but the officers should also so be acting in accordance with the discharge of their duties. The difference between the private agent and the public officer in this is that the principal of private agent is liable or responsible to the extent of power which is given to his agent, but in case of public officer, the state will be held liable for the extent of power which has been given to the public officer.

An agreement with a minor

An agreement with minor or entered by the minor is void from the beginning of the agreement which means as soon as the minors enter into a contract it became void and null from the time being it is created. Suppose, A guardian entered into an agreement on the behalf of the minor and makes a contract with another party.

Then, when the minor will attain the majority, he has to ratify the acts of his guardian which were done on his behalf with the full nature and effect of transactions. But, in case if the person who has entered into the agreement is not his Guardian, then the minor has no liabilities to ratify the act.

Knowledge required for the valid Ratification (Section – 198) 

A Principal who ratified the act should have the complete knowledge of facts of the act of the agent.  If the principal has no knowledge of the facts related to the case, then such ratification would be considered invalid.

The principal whose has the right to either approve the unauthorised act or to disown them but once if the principal ratifies the act of agent with full knowledge of circumstances, then he can’t revoke or recall the act as he will become bound to it as if it is originally been authorised by rectifier.

The agent is relieved from all the responsibilities of the contract at the time of ratification under this act. That is why ratification must be of voluntarily or of deliberate nature and the party should also be acknowledged about it so that he can be bound to the obligation to do so. Any material fact found defective later at time of ratification which has been set up purposely Then that ratification will amount to be invalid.

SALIENT FEATURES OF THE DOCTRINE OF RATIFICATION 

The salient features of doctrine of registration are as follows : 

• There must be an act by a person which should be done on a behalf of the other person and not for himself. 

For ratification the Agent whose doing the act on the behalf of the principal should do it for the principal only and not for himself. If he has some personal profit or benefits in his act then it will not come under the act of ratification. 

• The person for which the act is been done should have no knowledge and authority given to the other person. 

The principal shouldn’t have any knowledge or authority given to the other person for the act, the agent himself has to do the act for principal then only his act will be called ratified. 

• The should be a contract for which the rectifier must be competent. 

A contract should be there between the agent and the third party so that there can be an agreement and then it can come to the knowledge of the principal. 

• The Rectifier must be in existence at the time period of contract. He can be a natural or a juristic body. 

A rectifier can be anyone but he should be into existence. He can be a ordinary person or a juristic body. 

• The rectifier should be the person for whom the whole act is done. 

It is important that whole is done for the rectifier and nobody else. If the act is done for somebody else then that person will be called rectifier and nobody else. 

• There should be a valid contract at the time of ratification. 

If the contract at the time of ratification was invalid or void then the ratification will also be held invalid. Thus, it is important that there should be a valid contract at the time of ratification. 

• The act must be lawful. Only voidable contract can be ratified but not the void contract.

The act of the agent must be lawful and the contract which in been there between the parties should be voidable and not void. 

• There should be no injury made to the third party during ratification.

The most important is that third party should not get effect during this ratification. The rights of third party should be protected and the agent should look after that no injury or harm should be made to the third party because of him. 

• A minor after attaining the majority cannot ratify the contract which he entered when he was a minor as the contract was void since the beginning

A minor cannot enter into a contract and if he do so a guardian should be there, who can enter into a contract on the behalf of minor. But a contract with a minor is void from the time it is being it is being made with the minor. 

• The Ratification can only be done with the intention to ratify by having the full knowledge of facts. There should be the complete knowledge of facts known to the rectifier then only the ratification will be valid unless it will also b held void. 

Effects of Ratification (Section – 199)

If Principal ratifies any part of an unauthorised act done on his behalf, then a whole transaction and all the parts with it also has to be authorised with it.

If an agent comes into an agreement which consist of both authorised and unauthorised part and then comes to the principal to rectify it then the principal either have to ratify the whole act with both authorised and unauthorised part or he can disown them but he cannot take only authorised part from both authorised and unauthorised parts. 

• It means the principal has to ratify the whole transaction in one.
• Partial ratification will not be accepted.

Effects of ratification are as follows : 

• A relationships of contract is been established by the principal and the third party. 
• The relationship of the principal and agents is, one who ratifies and the other one is who does the act to extend  the act ratified is concerned. 

For Example:

A, the agent with the goods of P deals with C, who is the third party for the transfer of goods and comes to a contract with C in which both authorised and unauthorised acts were there. When agent a tells this to P about his act, He can either approve both the authorised and unauthorised acts or he can disown   both the acts but he has to rectify both authorised and unauthorised act. Either he had to rectify the whole transaction or he has to disown the whole.

Ratification of unauthorised act cannot injure the third party

 (Section – 200)

If any act done by agent on the behalf of the principle without his authority, harms the right or interest of the third party in any way and causes damages to it then such act cannot be ratified and such ratification cannot be made into effect. Under this section, the rights and interest of third party/person is been protected under it. 

Some of the acts which should be considered are as follows :

• Third party shouldn’t be made subject to any damages or should be made liable to lose any of his interest or right by the act of the agent. 

• An agent should not do anything which will cause harm to the third party nor the principal should ratify such acts if he has any knowledge of it. 

Conclusion

This Article is been made on ratification of contract which comes under section 196 to 200 of Indian Contract Act, 1872. The paper clearly concluded about the ratification where Under this section, the act says that when a person acts on the behalf of another without the authority to do so then another person can either approve his act or can disown his act.

If the person ratifies the act which was done on his behalf, then such act will be considered to be performed with his authority, but if the person disowns the act done by another person on his behalf, then the other person will be held liable for it. It is also discussed how If Principal ratifies any part of an unauthorised act done on his behalf, then a whole transaction and all the parts with it also has to be authorised with it.

Along with it Knowledge required for the valid Ratification, Effects of Ratification, Ratification of unauthorised act cannot injure the third party also discussed  under it. the rights and interest of third party/person is been protected under it. By this it is also concluded the rights and interest of third party/person is also been protected under it.

Reference : 

www.legalservices.india.com

www.blog-ipleaders-in.cdn.ampproject.org 

www.lexlife-in. 

www.docsmanuputra.in