PPT on "Agency" for BBA & B.Com 1st year students, CA, CPT, CS & CMA Foundation.
Business Law PPT by Sandeep Sharma.
Meaning with suitable example & explanation.
2. 1. Act on behalf of supposed principal: the act must have been
done for the supposed principal.
A B & C
Purchase
Ratify (approve)
(auth.)
Agency by Ratification
Rules of Valid Ratification
Supplier ‘Y’
3. 2. Existing principal: the principal must have been in
existence at the time of doing the act.
Agency by Ratification
Rules of Valid Ratification
3. Contractual capacity of the principal: principal must be
capable of making a contract both at the time of Making of
contract & at the time of ratification.
4. Full knowledge of all facts: a ratifier must have full
knowledge of all the facts & material circumstances in which
the act is done.
4. 5. Within reasonable time: ratification will not be effective if it
made after the reasonable time has expired.
Agency by Ratification
Rules of Valid Ratification
6. Lawful acts: an agreement which is void in law/illegal
cannot be ratified.
7. Whole transaction: no partial transaction can be ratified.
8. No conditional ratification: principal can’t put any condition
at the time of ratification otherwise it creates a new contract.
5. 9. Authority to ratify: only that person can ratify the act of
another who himself had authority to do the act.
Agency by Ratification
Rules of Valid Ratification
10. No damage to third party: Eg:- if B & C also ordered goods
from Supplier ‘Z’ on credit, then they can’t cancel it, just for the
sake to ratify the purchase from supplier ‘Y’.
11. Act relating to existing thing: there must be something
tangible & existing. Eg:- if a lease contract is ratified after
expiry, then there no use of ratification.
6. Agency by Ratification
Rules of Valid Ratification
12. Communication: the ratification is effective only when it
is communicated to the agent.
Communication of ratification may be ‘Express or Implied’.
Express when it is written or spoken &
When a principal accepts the benefits provided by the act of an
agent. It is the evidence of implied ratification.
7. Agent
To retain, like: advances
made, expenses for
conducting the business etc.
To receive remuneration
agreed upon.
Also entitled to retain
goods, papers etc.
To get compensation ,
caused by principal’s
neglect.
Principal
Direct the agent for the
conduct of his business.
To demand proper
accounts of the business of
agency.
To claim all amount taken
by agent on his behalf.
To get compensation ,
caused by agent’s neglect.
‘Rights’ of an Agent & a Principal
8. Agent
To conduct business as per
principal’s direction.
To conduct business with
skill.
To communicate with
principal.
To compensate for neglect,
misconduct etc.
Principal
To pay remuneration to his
agent.
To compensate against the
consequences of lawful
acts.
To compensate against the
consequences of acts done
in good faith.
‘Duties’ of an Agent & a Principal
9. Agent
Not to delegate his
authority to another.
Not to use information
against the principal.
Not to make secret profits
from agency.
Liable for fraud or
misrepresentation etc.
Principal
To compensate in respect
of injury caused by his
neglect.
‘Duties’ of an Agent & a Principal