Which agency arises when a license holder acts on behalf of a principal without prior authorization and the principal ratifies the action after the fact?

Which agency arises when a license holder acts on behalf of a principal without prior authorization and the principal ratifies the action after the fact?

• A. Express Authority
• B. Implied Authority
• C. Agency by Ratification
• D. Agency by Estoppel

Answer: (C)

Agency by ratification is the situation where someone acts for a principal without upfront permission, and the principal later approves or accepts those actions. Once the principal ratifies, the acts are treated as if they were authorized from the start, making the relationship retroactively valid. The key is that there was no initial authority, but the principal’s after-the-fact approval binds them to the transaction or actions just as if authority had existed. This differs from express or implied authority, where the agent already has authorization before acting, and from agency by estoppel, which involves preventing the principal from denying agency because of their own conduct that led a third party to believe an agency existed.

Agency by ratification is the situation where someone acts for a principal without upfront permission, and the principal later approves or accepts those actions. Once the principal ratifies, the acts are treated as if they were authorized from the start, making the relationship retroactively valid. The key is that there was no initial authority, but the principal’s after-the-fact approval binds them to the transaction or actions just as if authority had existed.

This differs from express or implied authority, where the agent already has authorization before acting, and from agency by estoppel, which involves preventing the principal from denying agency because of their own conduct that led a third party to believe an agency existed.