Which statement is true about ratification by principal in agency law?

Which statement is true about ratification by principal in agency law?

• A. The principal must know the material aspect of the act.
• B. The principal must ratify in writing only.
• C. Ratification is possible even if the principal is unaware of the act.
• D. Ratification can occur after the principal changes the act.

Answer: (A)

In agency law, ratification binds the principal retroactively only if the principal knowingly adopts the unauthorized act. The key requirement is knowledge of the material facts of the act and an intent to be bound by it. When the principal is unaware of what the agent did, there’s nothing informed to approve, so ratification cannot occur. That’s why the statement stating the principal must know the essential terms or material aspects of the act is the true one. Note that ratification can be express or implied by actions that show acceptance, and it does not have to be in writing. It’s also not valid if the principal later changes the act—the act being ratified must be the act as originally performed, because ratification is about adopting that specific act, not a modified version.

In agency law, ratification binds the principal retroactively only if the principal knowingly adopts the unauthorized act. The key requirement is knowledge of the material facts of the act and an intent to be bound by it. When the principal is unaware of what the agent did, there’s nothing informed to approve, so ratification cannot occur. That’s why the statement stating the principal must know the essential terms or material aspects of the act is the true one.

Note that ratification can be express or implied by actions that show acceptance, and it does not have to be in writing. It’s also not valid if the principal later changes the act—the act being ratified must be the act as originally performed, because ratification is about adopting that specific act, not a modified version.