Agency; unauthorised acts by agent; ratification by principal.
Facts: Lambert wrote to Bolton Partners, offering to lease Bolton Partners' sugar factory. Scratchley, the managing director of Bolton Partners, replied to Lambert accepting the offer on behalf of Bolton Partners. However, at the time he accepted the offer, Scratchley had not actually been given any authority to bind Bolton Partners to this contract. A dispute then arose about certain aspects of the agreement and Lambert stated that he was withdrawing his offer. Thereafter, the company directors ratified Scratchley's acceptance of the Lambert's offer.
Issue: Did the company's ratification of Scratchley's acceptance of Lambert's offer prevent Lambert from withdrawing it?
Decision: The court held that ratification operates retroactively, making the unauthorised act valid as if it had been authorised when it was done. This meant that Scratchley's acceptance of Lambert's offer gave rise to a completed contract, and it was too late for Lambert to withdraw his offer.
Reason: Cotton LJ said (at 306):
"The rule as to ratification by a principal of acts done by an assumed agent is that the ratification is thrown back to the date of the act done, and that the agent is put in the same position as if he had had the authority to do the act at the time the act was done by him."