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Contract Glossary

Ratification

Definition

Ratification is the act of formally approving or confirming an agreement, action, or transaction that was previously unauthorized or not yet binding. In contract law, ratification occurs when a person accepts and validates a contract that was made on their behalf without proper authority, or when they confirm a voidable contract they could have rejected. Once ratified, the contract is treated as if it was valid from the beginning. Ratification can be express (written or spoken confirmation) or implied (conduct that demonstrates acceptance).

In Practice

A sales representative signs a $200,000 supply contract on behalf of their company, but their authority limit is $100,000. When the company's CEO learns about the deal, she reviews the terms and decides they're favorable. By beginning to fulfill the order and accepting the first payment, the CEO has impliedly ratified the contract — even though the sales rep exceeded their authority, the company's conduct confirms the agreement.

Example Clause

Any contract, agreement, or commitment entered into by an agent or representative of the Company in excess of their delegated authority shall be void unless and until ratified in writing by an authorized officer of the Company. Ratification may be evidenced by written approval, partial performance, or acceptance of benefits under such agreement.

Frequently asked questions about ratification

Yes, that's exactly what ratification is — retroactive approval of a contract or action. However, certain conditions must be met: (1) the ratifying party must have full knowledge of the material facts, (2) they must have the capacity and authority to ratify, (3) the contract must have been capable of being authorized at the time it was made, and (4) ratification must occur before the other party withdraws. You can't ratify a contract that was illegal or impossible from the start.

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This content is for informational purposes only and does not constitute legal advice. For contracts with significant financial or legal implications, review by a qualified attorney is recommended.