Understanding Agency by Ratification

The video tutorial explains the concept of agency by ratification, where a principal can accept a contract made by an agent who either exceeded their authority or acted without any authority. It discusses two main scenarios: exceeding authority and acting without authority, providing examples for each. The tutorial outlines nine conditions that must be met for ratification to be valid and binding. It also includes case studies to illustrate these principles and concludes with a summary of the key points.

In the example of Ahmad and Ali, what was the price limit set by Ahmad for buying a house?

• 250,000 Ringgit

• 300,000 Ringgit

• 400,000 Ringgit

• 350,000 Ringgit

What happens if a principal does not agree with a contract made by an agent who exceeded their authority?

• The agent is promoted to a higher authority.

• The principal is automatically bound to the contract.

• The contract is renegotiated.

• The agency relationship is terminated, and the principal is not bound.

What does ratification mean in the context of agency?

• It means terminating a contract.

• It means creating a new contract.

• It means certifying or accepting a contract.

• It means rejecting a contract.

In the example of Randy and William, what was William's action without authority?

• Renting a car

• Selling a car

• Repairing a car

• Buying a car

What is one of the conditions for a valid ratification?

• The contract must be illegal.

• The agent must act under their own name.

• The ratification must be partial.

• The principal must have full knowledge of all material facts.

Why must ratification be made within a reasonable time?

• To ensure the principal's decision is timely and relevant.

• To avoid prejudice to third parties.

• To ensure the contract remains beneficial.

• To prevent the agent from gaining more authority.

What happens if even one of the nine conditions for ratification is not met?

• The ratification is still valid.

• The contract is automatically renewed.

• The ratification is not valid, and the contract is not binding.

• The agent becomes a principal.

What choice does a principal have when an agent acts without authority?

• The principal can only reject the contract.

• The principal can modify the contract.

• The principal can either accept or reject the contract.

• The principal must accept the contract.

What is the effect of agency by ratification if all conditions are fulfilled?

• The contract is void.

• The contract is binding between the principal and the third party.

• The principal gains new authority.

• The agent is dismissed.

What is the significance of the principal's knowledge in ratification?

• The principal's knowledge is irrelevant.

• The principal must have full knowledge for ratification to be valid.

• The principal should have partial knowledge.

• The principal's knowledge can be assumed.