What is agency by ratification?
Agency by ratification will arise when a principal approves and adopts an act that has already taken place on his behalf by an agent (i.e. principal is ratifying). The agent had no actual authority at the time that the transaction occurred, and therefore ratification will only exist if the principal subsequently approves the agents unauthorized act.
The requirements for ratification are as follows:
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What type of binding power can an agent have?
Assuming that the agent has power of attorney, then the agent will have the power to bind contracts if actual authority is granted, apparent authority is indicated , or ratification occurs.
What does it mean to have actual authority?
Actual authority is the authority that an agent will reasonably believe they have due to information communicated to them by the principal. Actual authority can be either expressly stated or implied. Express authority: Express authority is when the the principal directly grants binding power to the agent. This can be accomplished in writing or orally. […]
What is apparent authority?
Apparent authority refers to a situation in which a reasonable person or a reasonable third party would understand that an agent had the authority to act on their behalf. This kind of authority will bind the agent to the contract, even if actual authority does not exist.