Can a corporation be bound by a contract entered into by an agent without actual or apparent authority where the principal later ratifies it?

British Columbia, Canada


The following excerpt is from FYI Media Group Ltd. v. Gota Mandi Fashions Ltd., 2021 BCCRT 993 (CanLII):

20. A corporation may be bound by a contract entered into by an agent without actual or apparent authority where the principal later ratifies it. A principal can ratify a contract through an action, or depending on the circumstances, by acquiescence or inactivity. The test for ratification requires: a) the agent purported to act for the principal; b) the agent had a competent principal; c) the principal was legally capable of doing the act themselves at the time of ratification: Community Savings v. United Assoc. of Journeymen et al. 2002 BCCA 214.

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