10. ‘A’ enters into a contract with ‘B’ for buying B’s cat as agents for ‘C’ without B’s authority Repudiates the contract before ‘C’ comes to know it. ‘C’ subsequently ratifies the contrad and gives to enforce it. Advise B.

1. Facts of the Case

• ‘A’, without any authority from ‘C’, enters into a contract with ‘B’ to buy B’s cat as an agent on behalf of C.
• At the time of making this contract, A acts without C’s prior consent or authorization — making him an unauthorised agent.
• Before C comes to know of the contract, ‘A’ repudiates it, meaning he withdraws or cancels the contract.
• Later, ‘C’ learns about the transaction and ratifies the contract, approving A’s previous unauthorised act.
• B, however, now faces confusion as to whether the ratification by C makes the contract binding and whether C can enforce it, despite A’s earlier repudiation.
• The question arises: Can B be compelled to perform the contract after A has repudiated it but before C’s ratification?

2. Issues in the Case

1. Whether C’s subsequent ratification of A’s unauthorised act creates a binding contract between B and C.
2. Whether A’s prior repudiation of the contract, before C’s knowledge or ratification, affects the validity of the ratification.
3. Whether B is bound to perform the contract after the repudiation by A and subsequent ratification by C.
4. Whether ratification can relate back to the time of the contract when the agent himself had already withdrawn or revoked it.

3. Legal Principles Covered

a) Section 196 – Right of Ratification

• Under Section 196 of the Indian Contract Act, 1872, if an act is done by one person on behalf of another without authority, the person on whose behalf the act was done may ratify or disown such act.
• Upon ratification, the act is treated as if it had been performed with prior authority.
• However, this ratification must take place before the third party withdraws or before the contract is discharged.

b) Section 197 – Mode of Ratification

• Ratification can be express or implied.
• But for ratification to be valid, the agent must have purported to act on behalf of the principal and the principal must exist and be competent at the time the act was done.

c) Section 200 – Effect of Ratification

• Section 200 provides that ratification cannot be made if it injures the rights of third persons or if the act has already been withdrawn or rescinded.
• Thus, if the contract has been repudiated before ratification, the ratification has no effect on the rights of the other party.

d) Application of Principles

• In this case, A, without authority, made a contract with B.
• Before C ratified the contract, A repudiated it. This means that, at the time of ratification, the contract was already cancelled.
• According to Section 200, ratification cannot revive a contract that has already been rescinded or repudiated.
• Therefore, C’s ratification has no effect, and B cannot be forced to perform the contract.

e) Relevant Case Laws

1. Keighley, Maxsted & Co. v. Durant (1901) AC 240 (House of Lords)
   • An agent contracted in his own name to buy wheat, intending it for a principal who later ratified the deal. The court held ratification was invalid because the agent did not disclose he was acting for a principal and the principal could not ratify an act done in the agent’s own name.
2. Bolton Partners v. Lambert (1889) 41 Ch D 295
   • The court held that a valid ratification relates back to the date of the original contract, provided the contract still subsists at the time of ratification.
   • However, if the contract is already revoked or repudiated before ratification, ratification cannot operate.
3. Indian Contract Act, Sections 196–200
   • These sections collectively establish that ratification cannot validate a contract that has already been repudiated or terminated before ratification occurs.

4. Possible Judgement

• B is not bound to perform the contract, and C cannot enforce it after ratification.
• Since A (the unauthorised agent) repudiated the contract before C’s ratification, there was no subsisting contract at the time of ratification.
• Section 200 of the Indian Contract Act, 1872 clearly provides that ratification cannot injure third parties or revive a contract already rescinded or withdrawn.
• Therefore, C’s ratification is ineffective, and B is discharged from any obligation under the alleged contract.

Final Decision:

The ratification by C is invalid and ineffective because A’s repudiation occurred before C’s knowledge and ratification.
There was no subsisting contract capable of ratification at the time C approved it.
Hence, B is not bound to perform the contract or deliver the cat to C.

Supporting Provisions:

• Section 196 – Ratification of unauthorised acts
• Section 197 – Mode of ratification
• Section 200 – Ratification cannot injure rights of third persons or revive rescinded acts

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