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ASSIGNMENT 2
NAME
ID NUMBER : 2015747091
GROUP
: NBMFF2A
accepted the payment. Here the act of B accepting the payment is called ratification.
The effect of ratification is that the contract is binding on the principal as if the agent
has been given the authority from the beginning under Section 149 as retrospective
effect. There are 7 conditions stated that must be fulfilled before a principal can ratify
the contract. First, Act/contract must be unauthorized. Second, must expressed act
as an agent. Third, principal must be in actual existence. The case that can be
referred is Keighley Maxted v Durrant. An agent has been authorized to buy wheat at
certain price. Agent bought the wheat at a higher price in his own name although it
was intended for the principal. The principal agreed to take the wheat at a higher
price but later refused to take it. It was held because the principal was not liable
since
the
agent
did
not
express
Ghimself as an agent at the time of the transaction. Third, principal must be in actual
existence. The case that can be referred is Kelner v Baxter. A contract was made by
an agent on behalf of a company, which was yet to be formed, and the court held
that the principal (company) couldnt ratify the contract since it was not yet in
existence when the contract was made. Fourth, the principal must have full
knowledge of all material facts unless intend to ratify whatever facts and must be
made within reasonable time to constitute a valid ratification the principal must at the
time of ratification have full knowledge of all material facts. Fifth, the principal must
have contractual capacity at time contract made and at time of ratification as the
principal must at the time of activity as well as at the time of ratification. Sixth, the
whole contract must be ratified, a contract must be ratified as a whole and not in
part. There cannot be a partial ratification and a partial rejection. Lastly, ratification
must not injure third party as ratification should not lean to breach of contract that
may be harmful to third party.
Based on the question given, as we know Afedah was instructed by Azliza to
buy computer for a price not exceeding RM 6000 and she ordered a computer for a
price RM 6500 from Ariff Communication in her own name. This can be referred to
Section 149 and case Keighley Maxted v Durant where the principal agreed to take a
higher price but later refused to take it. It suit with Afedah case without acted as an
agent to Ariff Communication, when Azliza agreed and accepted the price even
exceeded the amount she authorized, but when Ariff Communication demanded
payment and computer price turned into expensive, Azliza refused to pay and
furthermore it was under Afedah herself.
In conclusion, Azliza was not liable since Afedah did not express herself as an
agent at the time of the transaction.