Also known as:ratifications · ratify · ratifies · ratified · ratifying · ratihabitio
Written by attorneys · grounded in primary & secondary sources — see below
The affirmance by a person of a prior act which did not bind him but which was done or professedly done on his account, whereby the act, as to some or all persons, is given effect as if originally authorized by him. Ratification extinguishes any power of avoidance and binds the ratifier as though the act had been authorized from the outset, provided the ratifier had capacity to authorize the act at the time of affirmance and the actor purported to act on the ratifier's behalf.
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How it applies
Common Examples
6
Partnership Loyalty Breach Ratified
Raymond Ramos and Renata Russo formed a two-person partnership to develop software. Raymond negotiated a side contract with a client using partnership engineers and code without telling Renata. After a brief meeting in which Raymond disclosed only a short oral summary, Renata approved the deal. Because full material facts were never disclosed, the partners' approval did not constitute ratification, leaving Raymond liable to the partnership for breach of the duty of loyalty.
Trustee Breach Ratified by Beneficiary
Ravi Reddy, trustee of a family trust, sold trust property to a relative at an undervalue without informing beneficiary Rebecca Ross. After learning the facts and her rights, Rebecca accepted the sale proceeds and continued to treat the transaction as valid for two years. Her knowing acceptance constituted ratification, barring any later claim against Ravi for breach of trust.
Supervising Lawyer Ratifies Misconduct
Ralph Richardson, a partner, learned that associate Raphael Rivera had filed a pleading containing false statements. With full knowledge of the specific conduct, Ralph reviewed the filing and directed Rivera to proceed without correction. Ralph's knowing approval constituted ratification, making him responsible for the violation under the rules of professional conduct.
Minor Ratifies Contract After Majority
At age seventeen, Radiant Technologies' future founder signed a software license agreement. After turning eighteen, the founder deposited the first royalty check, continued performance for eighteen months, and never disaffirmed. The continued acceptance of benefits after majority constituted ratification, extinguishing the power to avoid the contract.
Minor Ratifies Gift After Majority
At age sixteen, Riverstone Manufacturing's owner gifted company equipment to a friend. After reaching majority, the owner took no steps to recover the equipment for a reasonable time and instead permitted the friend to retain and use it. The failure to disaffirm within a reasonable time after majority constituted ratification of the gift.
Promoter Transaction Ratified by Shareholders
Before Redwood Bank was formed, its promoter sold his own property to the future corporation at a substantial markup. After formation, the promoter disclosed the profit and terms to all persons contemplated as original investors, who then approved the transaction. The full disclosure followed by approval constituted ratification, preventing the corporation from recovering the secret profit.
Common questions
Frequently Asked
5
What knowledge must a beneficiary possess for ratification of a trustee breach to be effective?+
Ratification is ineffective if the beneficiary did not know of the beneficiary's rights or of the material facts relating to the breach at the time of the ratification. Ratification is also ineffective if induced by the trustee's improper conduct.
Does ratification of a minor's contract require express words or can it occur by conduct?+
Ratification may occur by conduct. A minor who reaches majority and accepts benefits under the contract or continues performance for an extended period ratifies the agreement and loses the right to disaffirm.
When does a partner's disclosure suffice for valid ratification of a loyalty breach?
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All partners may ratify a transaction that would otherwise violate the duty of loyalty only after full disclosure of all material facts. A brief oral summary that omits use of partnership resources, financial terms, and conflicts does not satisfy the requirement.
Can a supervising lawyer be held responsible for another lawyer's violation through ratification?+
A lawyer with direct supervisory authority is responsible for another lawyer's violation if the supervising lawyer, with knowledge of the specific conduct, ratifies it. Ratification occurs when the supervisor reviews the conduct and directs that it continue.
What is required for a promoter's self-dealing transaction to be ratified by a corporation?+
A promoter may not retain secret profits from a sale to the corporation unless full disclosure is made to and approval obtained from all persons contemplated as part of the original financing scheme. Disclosure to only some initial subscribers is insufficient.
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Business Associations Agency and PartnershipAgency relationships · TerminationUBEIntermediate