Keighley, Maxsted & Co. v. Durant (1901)

Contract II (Special Contracts) · Agency

Facts.

An agent, authorised to buy wheat at a certain price for himself and his principal jointly, bought at a higher price in his own name, intending it to be for the principal. The principal purported to ratify. The seller then sued the principal.

Issue.

Can a principal ratify a contract that the agent made in his own name, without professing to act for the principal?

Held.

No. An undisclosed principal cannot ratify. Ratification is possible only where the agent professed, at the time, to act on behalf of the principal.

Why it matters.

It fixes the first essential of ratification (Topic 4) — the act must be done avowedly on the principal’s behalf.

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