Kent, without actual authority, contracted to buy computer equipment from Fox Corp. for Ace Corp.  Kent told Fox that Kent was acting on Ace’s behalf.  For Ace to ratify the contract with Fox,
A. Ace must notify Fox that Ace intends to ratify the contract.
B. Kent must be a general agent of Ace.
C. Ace must know all material facts relating to the contract at the time it is ratified.
D. Kent must have acted reasonably and in Ace’s best interest.
Answer:C
C is corrent. Ratification occurs when there is a subsequent approval by the principal of an agent’s unauthorized action. In order for ratification to take place, the principal must have knowledge of all material facts regarding the contract.
A is incorrect. It is not necessary that the principal expressly communicate an intent to be bound. If the principal acts in a manner as to imply ratification (e.g., by taking advantage of the benefits of the contracts), then the principal’s actions will be interpreted as ratification.
B is incorrect. A principal may ratify a contract entered into by any type of agent.
D is incorrect. It makes no difference whether or not the agent acts reasonably and in the best interest of the principal. The principal may ratify any contract as long as the requirements for ratification are satisfied.