AGENCY
RATIFICATION & ESTOPPEL
Prepare By:
Nurhima Hassan
Nur Hafizah
Asysyuarah Tuah
Zulpadhli Saludin
Vishnovartan A/L Pulainthran
1.
AGENCY BY RATIFICATION
“The safety of the people shall be the highest law.”
-Marcus Tullius Cicero
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DEFINITION OF RATIFICATION
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1. Ratification is the act of verifying an act
that was originally unauthorized.
◈ Section 149, Contracts Act 1950
Agency By Ratification Occurs When:
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1.
A person misrepresents
himself/herself as another’s
agent when in fact he/she is
not ; or acts of the agent
committed
outside
the
scope of his authority.
2.
The purported principal
ratifies or accepts the
unauthorized act expressly
or impliedly.
◈
The principal is bound to
perform and the agent is
relieved of any liability for
misrepresentation.
◈
Case: Keighley Maxted
and Co. v Durant
Keighley Maxted & Co. v Durant
Facts :
An agent, Roberts was authorized by the appellants to buy wheat at a certain
price. The agent exceeded his authority and bought at a price higher than
authorized and in his own name but intending it for Keighley. Keighley agreed
to take the wheat at that price but failed to take delivery.
Court Decision:
The House of Lords held that Keighley was not liable to Durant, as he could
not be held to have ratified Roberts’ contract, since Roberts at the time of the
contract DID NOT progress to act as agent.
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Ratification Of Contract Can Only Be Done
Under The Following Conditions:
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2.
1.
Section 149
The act done shall be
unlawful, which is out of
the power of the agent or
such act above;
◈ Section 188;
or act done is committed
by someone pretending to
be an agent.
Unauthorized
The act or contract must
be unauthorized.
3.
Recognized By
Law
The unauthorized act must
be one which is recognized
by law, if the act is against
the law, the ratification will
cease to exist.
4.
Act As Agent For
The Principals.
The agent must, at the
time of the contract,
expressly act as agent for
the principals.
◈ Section 149,CA 1950.
◈ He must not allow the
third party to think that
he is the principal.
◈ Case:
S.R.M Meyappa
Chettiar v Lim Lian
Koo.
Ratification of contract can only be done
under the following conditions:
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5.
6.
Section 153 &
Illustration.
The ratification must
not injure a third party,
that is, it must not
subject the third party
to
damages
or
terminate his right or
interest.
Section 151.
The principal must, at
the time of ratification,
have full knowledge
of all material facts,
unless it can be shown
that he intends to ratify
the contract whatever
the facts may be, and
assume responsibility
for them.
7.
Agent Must Have
A Principal.
The agent must have a
principal, who is in actual
existence or capable of
being ascertained, when
the contract is made.
◈ No
one can ratify
contract if he is not
party
competent
contract at the date
the contract.
a
a
to
of
◈ Case : Kelner v Baxter
RATIFICATION EFFECTS :
The act
originally
invalid is valid
and the
principal is
responsible
for it.
The ratification
in force not at
the date of
ratification, but
on the date the
unauthorized
act is made.
Ratification
ratified the
whole contract.
(Section 151)
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Ratification
must be made
in reasonable
time (Less
than 1 month).
2.
AGENCY BY ESTOPPEL
“The safety of the people shall be the highest law.”
-Marcus Tullius Cicero
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DEFINITION OF ESTOPPEL
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1.
Estoppel adalah prinsip undang-undang yang menghalang
seseorang
daripada
menyatakan
fakta
yang
bertentangan dengan tuntutan atau tindakan terdahulu.
2.
Dengan kata lain, estoppel menghalang seseorang
daripada menafikan tuntutan yang dibuat atau
perbuatan yang dilakukan oleh orang itu sebelum ini.
AGENCY BY ESTOPPEL
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1.
Umumnya, seorang prinsipal tidak akan terikat dengan
perbuatan yang dikuatkuasakan oleh ejen bagi pihaknya
tanpa kebenarannya dahulu.
2.
Walaubagaimana pun, sekiranya prinsipal melalui katakata atau kelakuannya membuatkan pihak ketiga
mempercayai bahawa ejen itu adalah ejennya yang
sebenar dan pihak ketiga mempercayainya sehingga
merugikan pihak ketiga, maka prinsipal tadi tersekat atau
dihalang daripada menafikan tentang kewujudan kuasa
agen itu.
Freeman & Lockyer V Buckhurst Park Properties Ltd
Facts :
Terdapat 4 orang pengarah dalam sebuah syarikat. Salah seorang daripada
pengarah, iaitu A, telah membuat kontrak bagi pihak syarikat dengan T (pihak
ketiga) sedangkan A tiada kuasa untuk berbuat demikian. Pengarah-pengarah
lain yang mengetahui hal tersebut tidak pula memberitahu kepada T tentang
hal sebenar ataupun menghalang kontrak itu daripada dibuat. Ini membuatkan
T terdorong untuk mempercayai A memang diberi kuasa untuk berkontrak
dengannya.
Court Decision:
Syarikat tersebut disekat atau dihalang daripada menafikan bahawa A adalah
agen syarikat dan tidak mempunyai kuasa untuk membuat kontrak itu.
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THANK YOU
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S.R.M Meyappa Chettiar v Lim Lian Koo
Facts :
PC, the attorney of SC, entered into an agreement with the respondent under which the PC
handed over to the respondent a piece of land belonging to his principal in consideration of RM
7,000/- and agreed ‘ upon the return of normal conditions, the vendor shall obtain a special
power of attorney from the said SC now in India and execute the true and lawful transfer of the
said land at the purchaser’s own expenses’. He further agreed that if he was unable to obtain the
necessary power from his principal the RM7,000/- will be return to the respondent. At the trial, the
learned judge held that the agreement had been satisfied by SC and therefore dismissed a claim
for recovery of possession of the land.
Court Decision:
The Court of Appeal held that the terms of the agreement showed that PC was acting in his
personal capacity and therefore the principal of ratification could not apply to the agreement.
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Kelner v Baxter
Facts :
A contract to buy a hotel made by an agent on behalf of a company which was
about to be formed, could not be ratified by the company since it did not exist
at the time.
Court Decision:
The agent was therefore held liable for the contract unless the third party
agreed to release him.
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Section 149 Contracts Act 1950
“if an authorized act forms a part of a transaction which includes an
authorized act, a person on ratifying the unauthorized act ratifies the
whole transaction.”
◈
It also operates retrospectively.
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Section 188, Contracts Act 1950
“A person untruly representing himself to be the authorized agent of
another, and thereby inducing a third person to deal with him as such
agent, is liable, if his alleged employer does not ratify his acts, to make
compensation to the other in respect of any loss or damage which he
has incurred by so dealing.”
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Section 151, Contracts Act 1950
“No valid ratification can be made by a person whose knowledge
of the facts of the case is materially defective.”
◈
This section deals with knowledge requisite to Bali valid
ratification.
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Section 153
Illustrations
“An act done by one person on
behalf of another, without that
other person’s authority, which, if
done with authority, would have the
effect of subjecting a third person to
damages, or of terminating any right
or interest of a third person, cannot,
by ratification, be made to have that
effect.”
(a) A, not being authorized thereto by B,
demands on behalf of B, the delivery of a
chattel, the property of B, from C, who is in
possession of it. This demand cannot be
ratified by B, so as to make C liable for
damages for his refusal to deliver.
(b) A holds a lease from B, terminable on
three month’s notice. C, an unauthorized
person, gives notice of termination to A. The
notice cannot be ratified by B, so as to be
binding on A.
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