Ratification occurs when someone acts as an agent without authorization, and the principal later accepts the benefits of those actions. Once ratified, the agency relationship is treated as if it existed from the beginning of the unauthorized act.
An unlicensed assistant shows a property and negotiates terms with a buyer without the broker's knowledge. When the broker learns about it and proceeds with the transaction, the broker has ratified the assistant's actions, creating agency by ratification.
Agency by ratification requires: (1) someone acted as agent without authority, (2) the principal knew about the acts, and (3) the principal accepted the benefits. The ratification RELATES BACK to the original act.
Related Terms
Related Concepts
A legal relationship in which one person (the agent) is authorized to act on behalf of another person (the principal) in business transactions with third parties.
The highest legal obligation of trust and confidence owed by an agent to their principal, requiring the agent to act solely in the principal's best interest.
A situation where a single agent or brokerage represents both the buyer and the seller in the same real estate transaction.
An arrangement where a brokerage assigns separate agents within the firm to represent the buyer and seller in the same transaction, allowing each client to have dedicated representation.
A non-agency relationship where the broker facilitates a real estate transaction without representing either party, owing limited duties of honesty, fairness, and competence to both.
Frequently Asked Questions
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