What is meant by ratification in contract law?

In contract law, ratification refers to the approval of an act that was previously unauthorized. This concept is pivotal when dealing with contracts, especially those involving a party who may not have had the authority to enter into the agreement initially. When an unauthorized party engages in a contract, the affected party has the option to later ratify, or approve, that contract, thereby giving it legal force and effect as though it had been authorized from the beginning.

For example, if an agent acts on behalf of a principal without explicit permission, the principal can choose to ratify that agreement, which then obligates both parties as if the agent had the authority to make that agreement in the first place. This mechanism protects the interests of both the agent and the third party involved and maintains the sanctity of contractual agreements.

Understanding ratification is essential, as it differentiates the acceptance of unauthorized acts from the concepts of rejection or cancellation of contracts. Thus, the process of approval signified by ratification ensures that parties can still carry on with transactions even when procedural missteps occur initially.