Chapter X - Agency
Section 197
Section 197: Express and implied ratification
Ratification may be express or inferred from conduct.
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This article is for general information. Refer to the Indian Contract Act, 1872 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
Ratification may be expressed or may be implied in the conduct of the person on whose behalf the acts are done.
Illustrations
(a)A, without authority, buys goods for B. Afterwards B sells them to C on his own account; B’s conduct implies a ratification of the purchase made for him by A.
(b)A, without B’s authority, lends B’s money to C. Afterwards B accepts interest on the money from C. B’s conduct implies a ratification of the loan.
Rule and business relevance
The illustrations show conduct such as selling unauthorised purchases on one’s account or accepting interest on an unauthorised loan. The conduct must be assessed in context.
Limits and related provisions
Do not ignore the material-knowledge requirement in section 198. Receipt or conduct should not be treated mechanically as ratification without examining the circumstances.
Hypothetical business example
Hypothetical example: A principal learns of a purchase made without authority and then sells the goods on the principal’s own account. That conduct may imply ratification.
Practical decision flow
Identify express words or relevant conduct after the act.
Check what the person knew at that time.
Assess whether the conduct adopts the transaction as a whole.
Check the applicable legal framework
This guide explains the central provision. Applicable State amendments, the agreement, transaction date and other governing laws can affect its application. Check the current legal framework before relying on it for a commercial decision.
Practical checklist
Do
- Identify express words or relevant conduct after the act.
- Check what the person knew at that time.
- Assess whether the conduct adopts the transaction as a whole.
Avoid
- Do not ignore the material-knowledge requirement in section 198. Receipt or conduct should not be treated mechanically as ratification without examining the circumstances.
Glossary
- Express ratification
- Ratification stated directly.
- Implied ratification
- Ratification inferred from conduct.
Frequently asked questions
Must ratification always be written?
This section recognises express or implied ratification, subject to applicable requirements.
Can accepting transaction benefits matter?
Yes. The illustrations include selling purchased goods and accepting loan interest.
Is knowledge irrelevant where conduct is clear?
No. Section 198 remains relevant.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026