ABSTRACT
Under the doctrine of ratification, a principal can become bound by a contract that was made in its name but without its authority based on the principal’s subsequent silence. How can this be reconciled with the contract rule that the creation of a contractual obligation requires a manifestation of assent by the obligor? What is the rationale for imposing contractual liability on principals without their personal consent? To answer these questions, this Article examines the history of ratification, with particular emphasis on fifteen US Supreme Court cases that developed the doctrine. The Article concludes that ratification is a species of agency law, the body of precedent that holds principals responsible for what they do through others. The question under agency law is not whether the principal personally manifested assent to the contract but whether the manifestation of assent by an agent or purported agent of the principal should be attributed to the principal (that is, treated as if it were the principal’s own action). Attribution under the ratification doctrine is justified if, with knowledge of the material facts, the principal approved the actions of the agent, tried to take advantage of the agent’s actions, or waited too long to express disapproval. This expansion of principal responsibility through ratification recognizes the practical reality of group action and adds an informal, dynamic, social dimension to US business law.
Harris, Daniel, Ratification, Constructive Consent, and the US Supreme Court (March 1, 2024).
Leave a Reply