S
Sahaj Vidhi
M.P. Civil Judge Question Paper 2019 Phase I

Explain the doctrine of Ratification. What acts cannot be ratified?

Verified Answer
  1. Core Legal Answer & Context: Ratification, under the Indian Contract Act, 1872, is the subsequent adoption and confirmation by a person (the principal) of an act done by another person (the agent) without authority, or exceeding their authority, as if it had been done by their prior authority. When an act is ratified, it has the same effect as if the agent had been authorized to do it at the time of the act, meaning it operates retrospectively.

Acts that cannot be ratified: (a) Illegal or Void Acts: An act that is unlawful or void ab initio cannot be ratified, as ratification cannot make a void act valid. (b) Acts Injuring a Third Party: An act which subjects a third person to damages, or terminates any right or interest of a third person, cannot be ratified to the prejudice of that third person. (c) Acts Not Done on Behalf of a Principal: The agent must have professed to act as an agent for an identifiable principal at the time of the act. An act done by a person on their own account cannot be subsequently ratified by another. (d) Non-existent Principal: The principal must be in existence and competent to contract at the time the act was done. (e) Lack of Knowledge: The principal must ratify with full knowledge of all material facts. Ratification made without such knowledge is not valid. (f) Ultra Vires Acts: If the act is beyond the legal capacity or powers of the principal (e.g., a company acting ultra vires its memorandum), it cannot be ratified.

  1. Relevant Statutes and Sections:
  • Indian Contract Act, 1872: Sections 196, 197, 198, 199.
  1. Important Landmark Cases:
  • S.N.R. Sundara Rao & Sons v. CIT (1957): Explained the retrospective effect of a valid ratification.
  • Narayan Chetty v. Muthiah Chetty (1907): Emphasized the requirement that the agent must profess to act for the principal for ratification to be possible.
  1. Clear Conclusion: Ratification allows a principal to retrospectively validate an agent's unauthorized acts, but it is strictly governed by law, prohibiting ratification of illegal acts, acts detrimental to third parties, or acts where the agent did not purport to act for an existing and competent principal with full disclosure of facts.