Question

Joe, in his capacity as an agent for Silvio, is authorised to purchase cattle at a limit of $200 each. Joe could not purchase the cattle at this price so he purchased in his own name, 400 cattle at $300 each. Subsequently Silvio conferred with Joe and agreed to ratify his act. Neither Joe nor Silvio will pay for the cattle when delivered. Who is liable?

Answer 1

This is the case of agency where agent(ie.Joe) is acting for the Principal (ie. Silvio).

When acts are done by one person on behalf of another, but without his knowledge or authority, he may elect to ratify or to disown such acts. If he ratifies them, the same effects will follow as if they had been performed by this authority.

In this case Silvio conferred with Joe and agreed to ratify his act (ie. Purchasing of cattle on his own account).

So, the Silvio has rectified Joe's act, now effect will be that this act of purchasing of cattle has been performed by Silvio's authority.

Hence, Silvio will be liable to pay/compensate for the cattle.