Sections 196 to 200 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
What if someone acts on your behalf without your knowledge or authority? Section 196 gives you a choice: you may ratify the act or disown it. If you ratify, the same effects follow as if you had authorised it. The next four sections tell you how ratification is shown, what knowledge it needs, that it covers the whole transaction, and that it cannot be used to harm a third person.
Where acts are done on behalf of another without his knowledge or authority, he may elect to ratify or to disown them; if he ratifies, the same effects follow as if they had been performed by his authority (s.196). Ratification may be expressed or implied in conduct (s.197). It is not valid if the person's knowledge of the facts is materially defective (s.198). Ratifying one act ratifies the whole transaction of which it was part (s.199). Ratification cannot subject a third person to damages or end a third person's right or interest (s.200).
Section 196: the choice to ratify or disown
"Where 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 ratify them, the same effects will follow as if they had been performed by his authority."
Note the word "elect": the person on whose behalf the acts were done chooses. The section does not set a time limit and does not say what disowning must look like. The effect of ratifying is stated in full: "the same effects ... as if they had been performed by his authority".
If a person acted for you without authority and you are deciding what to do, or if you dealt with someone who may have lacked authority, a legal consultation can help you look at the facts against these sections.
Section 197: express or implied ratification
"Ratification may be expressed or may be implied in the conduct of the person on whose behalf the acts are done."
The Act's 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.
In both, the principal did nothing in words. His later conduct, treating the goods as his own or taking the interest, is read as ratification. This echoes how section 187 allows authority to be implied from circumstances; see our article on express and implied authority. Ratification is the after-the-event counterpart of authority under section 186.
Section 198: knowledge needed
"No valid ratification can be made by a person whose knowledge of the facts of the case is materially defective."
The test is materially defective knowledge. The section does not define "materially"; it is a matter of the facts. A principal who ratifies without knowing the main facts has not made a valid ratification on the words of the section.
Section 199: the whole transaction
"A person ratifying any unauthorized act done on his behalf ratifies the whole of the transaction of which such act formed a part."
A principal cannot pick the benefits and drop the burdens of one transaction. Ratifying a part is ratifying the whole of the transaction of which it was part. The section does not say how to decide what the "transaction" is; that depends on the facts.
Section 200: ratification cannot injure a third person
"An act done by one person on behalf of another, without such other person's authority, which, if done with authority, would have the effect of subjecting a third person to damages, or of terminating any right or interest of a third person, cannot, by ratification, be made to have such effect."
The Act's illustrations.
(a) A, not being authorized thereto by B, demands, on behalf of B, the delivery of a chattel, the property of B, from C, who is in possession of it. This demand cannot be ratified by B, so as to make C liable for damages for his refusal to deliver.
(b) A holds a lease from B, terminable on three months' notice. C, an unauthorized person, gives notice of termination to A. The notice cannot be ratified by B, so as to be binding on A.
Section 200 draws a line. Ratification can make a principal bound by what was done for him; it cannot be used to turn an unauthorised act into one that damages a third person or ends his rights.
| Section | Point |
|---|---|
| 196 | Elect to ratify or disown; ratification gives the same effects as authority |
| 197 | Ratification may be express or implied in conduct |
| 198 | No valid ratification where knowledge of the facts is materially defective |
| 199 | Ratifying part ratifies the whole transaction |
| 200 | Ratification cannot subject a third person to damages or end his right or interest |
A modern example (ours, not the Act's)
Rohit, a sales representative of Aarav Electricals, signs a supply order for display panels in the company's name with a retailer, though he had been told not to commit to supplies above a limit without approval. The owner, Mrs. Kulkarni, hears of it after the panels are shipped. If she ratifies, section 196 says the same effects follow as if the order had been authorised. If she gives no words but accepts the retailer's payment and sends the next batch, section 197 reads her conduct as implied ratification. If she ratifies only the part about price but wants to avoid delivery terms in the same order, section 199 says she ratifies the whole of the transaction of which the act formed a part. If she was told the order was for a smaller quantity than it was, her knowledge of the facts was materially defective and, under section 198, no valid ratification could be made by her until she knew the facts.
Now suppose Rohit, without authority, sent the retailer a notice ending the retailer's right to a stock-return arrangement. Mrs. Kulkarni cannot ratify that notice so as to bind the retailer; section 200's illustration (b) is the model.
What can the parties change?
The sections do not mention contrary agreement. A principal and agent can agree in advance what the agent may do, which reduces the occasions for ratification. A principal may also say expressly that he disowns an act. The section 200 limit protects third persons by operation of the Act; the text gives no way for the parties to remove that protection.
Practical points
- Decide promptly: the Act says you "may elect", so do not leave an unauthorised act in limbo.
- Know the facts before ratifying: section 198 makes knowledge matter.
- Remember the whole transaction: do not assume you can take the benefit and leave the burden.
- Watch your conduct: accepting benefits can imply ratification under section 197.
Need help deciding whether to ratify?
Our legal consultation service can help you review an unauthorised act, consider what ratifying or disowning would mean under sections 196 to 200, and document your choice. Other laws may also apply to your facts.
Key takeaways
- A person on whose behalf acts were done without his knowledge or authority may elect to ratify or disown them (s.196).
- Ratification has the same effects as authority.
- It may be express or implied in conduct (s.197).
- No valid ratification where knowledge of the facts is materially defective (s.198).
- Ratifying one act ratifies the whole transaction (s.199).
- Ratification cannot subject a third person to damages or end his right or interest (s.200).
Read next
- Sections 191 to 195: sub-agent and substituted agent
- Section 201: termination of agency
- Sections 227 and 228: principal bound when agent exceeds authority
- Agency: sections 182 to 238
Disclaimer: Based on the text of the Indian Contract Act, 1872 as consulted on 1 October 2026. Many questions under this Act turn on case law and on the wording of the particular contract, which this article does not cover. It is general information, not legal advice; check the official text and take advice before acting.