To Ratify An Agreement A Principal Must Know

15.5.7 Another time limitation of ratification is that an act that must be carried out before a given date can no longer be ratified by the contracting authority after that period. It is stated that if a time limit is set for the performance of an act, whether by law or by agreement, the doctrine of ratification cannot apply if it had the effect of prolonging that time – see Presentaciones Musicales S.A. v Secunda [1994] Ch 271. Since the contract concluded by the agent stipulates that the act must be completed before a given date, ratification should not be such that an essential aspect of the agreement is actually modified. Therefore, if an option to purchase real estate is to be exercised within 14 days of the date of the option and the agent exercises the option without power, the principal cannot ratify the agent`s act at the end of the 14 days. As a result, the contracting authority would have more time to decide on the exercise of the option. Ratification authorised a posteriori creates rights and obligations between contracting authorities and third parties. These rights cannot be withdrawn. According to McEvoy vs. Belfast Banking Co [1935], if a principal expresses its intention not to ratify, it cannot ratify it at a later date. Ratification also voids any breach of a guarantee by an agent (see agents` commitments on the next page). Since the agent`s action is treated as an authorized verification, Verschures Creameries against Hull and Netherlands Steamship Co [1921] confirmed that an agent was entitled to remuneration for ratified legal acts.

The only question that could call into question the consequences of ratification is what will happen if the client is forced to ratify in order to avoid jeopardising its economic reputation. It is proposed that the client must then oppose his representative. 15.4.10 In exceptional cases, an agent without authority may have a clear power of representation, not that the agent is authorized, but that the agent`s principal has authorized the transaction in question. The line between the two situations is thin and, therefore, the courts are careful not to conclude generously that an agent is entitled to declare that the principal has agreed to the transaction. One such case is Kelly v Fraser [2013] 1 AC 450, where a company`s director of benefits managed the day-to-day management of the company`s retirement plan. Under the rules of the plan, directors had discretion to include benefits from other pension funds in the plan. Although the directors did not authorize the head of the benefits department to do so, the Director incorporated into the plan the accumulated value of the defendant`s right to his former employer`s pension plan. This was done without the knowledge of the directors. Nevertheless, the court maintained the agents bound to what the chief was doing.

Although there was no explanation from the agents to the defendant that the officer was entitled to do what he was doing, the directors had entrusted the chief with the task of notifying the chief of the authorizations that he had apparently authorized, in the circumstances, to inform the defendant that the transferred fund had been included in the pension fund. The agents were therefore bound by what had been communicated to the defendant. 15.8.9 If the terms of the contract are incompatible with the existence of an unde mentioned contractor, the uncited procuring entity may not intervene in the contract. For example, the contract may contain an explicit or implied provision that excludes the possibility of an unde mentioned procuring entity, for example.B. if the contract describes the agent as the „owner” of the asset, which objectively indicates that the agent acted only for himself and excludes the possibility that the agent is acting for someone else. Even if there is no implied authority, the agent may act in an emergency in a manner that would normally require explicit authorization from the payer. If unforeseen circumstances arise and it is not possible to communicate with the client to find out what his wishes would be, the contractor may do what is reasonably necessary to avoid a significant loss to his contracting authority. . . .