Ratification: Overview, definition and example
What is ratification?
Ratification in the context of contracts refers to the act of formally approving or accepting an action, agreement, or decision that was made by someone else on your behalf, often without your prior consent. By ratifying an action, you agree to be bound by it, even if it was initially outside the scope of your authority or knowledge. Ratification makes the action legally valid, as if you had authorized it from the beginning.
Why is ratification important?
Ratification is important because it ensures that contracts and actions taken by an agent or another party, which might not have had your prior approval, are still legally recognized. It can be used to confirm that you accept and agree to something, even if it was done without your explicit permission initially. This helps clarify situations where there may be uncertainty about whether the action is valid or enforceable.
Understanding ratification through an example
Imagine you run a business and your employee negotiates a contract with a supplier on your behalf, but without your prior approval. If you later agree to the terms of that contract, you are ratifying the actions of your employee. By ratifying it, you accept all the terms and conditions as though you had approved the contract from the start.
In another case, a person acting on behalf of a company enters into an agreement outside of their authorized powers. If the company later accepts the benefits of the agreement, such as receiving goods or services, the company may ratify the contract and make it binding.
An example of a ratification clause
Here’s how a ratification clause might look in a contract:
"Any act or decision taken by one party on behalf of the other, without prior approval, will be subject to ratification by the other party. The party's acceptance of the benefits of such act or decision shall constitute ratification."
Conclusion
Ratification allows for retroactive approval of actions, making them legally binding. It’s particularly useful when parties need to affirm or accept something that was done without their prior consent. Understanding ratification is crucial for businesses to ensure that any actions taken on their behalf can be confirmed and legally enforced.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.