First Principles of Business Law

4. Ratification of previously unauthorised acts

4.2. Ratification by a disclosed principal

Read the facts below, and then answer the questions.

A, an art collector in Melbourne, knows that a particular painting is being sold by auction in Brisbane. She writes to B, a friend of hers saying: "I want to acquire the Gerhardt landscape which is being auctioned in Brisbane next Thursday. Please will you go and bid for it on my behalf. I am prepared to pay a maximum of $50,000." At the auction B identifies himself as A's agent and bids for the Gerhardt landscape until the price reaches $50,000 but it is sold to someone else for $90,000. The very next painting to be auctioned is a portrait by Gerhardt. Thinking A would want to own it, B again identifies himself as A's agent and buys the portrait for $40,000. When B tells A about the purchase, A says: "That's good. I want that portrait." But the auctioneer, discovering the true facts, disputes that A is the buyer of the portrait.

1. Was B's act of bidding for the portrait authorised at the time he performed it, either expressly or impliedly?

2. Even if the act of bidding for the portrait was not authorised, did B make it known that he was bidding as A's agent?

3. Is A's approval, given after the event, sufficient to give B authority for what he did, and to make A the buyer of the portrait?