Which statement best describes ratification in agency law?

• A. Ratification occurs automatically without principal awareness.
• B. The principal informs the agent of his actions and the principal accepts, binding retroactively.
• C. Ratification requires a new written contract.
• D. Ratification is the same as express authority.

Answer: (B)

Ratification in agency law means the principal approves after the fact an act the agent performed without authority, making the principal bound to that act as if the agent had been authorized from the start. The best description is that the principal informs the agent of what was done and then accepts it, which retroactively binds the principal to the transaction. This acceptance can be express or implied by conduct, and it does not require a new contract to be created. Ratification is not automatic or unconditional, and it is different from having pre-existing express authority—the latter is granted before the act, while ratification occurs after the act.