Keighley, Maxsted and Co v Durant
Rule established
Ratification is possible only where the person doing the act professed at the time to act on behalf of the principal. An undisclosed intention to act for another cannot be converted into agency by subsequent ratification.
Facts
- Keighley, Maxsted and Co authorised an agent, Roberts, to buy wheat at a specified price.
- Roberts was unable to buy at that price.
- He bought wheat from Durant at a higher price, intending the purchase to be on joint account for himself and Keighley, Maxsted and Co.
- He did not disclose to Durant that he was buying for anyone other than himself.
- Keighley, Maxsted and Co subsequently agreed to take the wheat on joint account, purporting to ratify the purchase.
- They then failed to take delivery, and Durant sued them for breach.
Issue
- Whether a principal may ratify a contract made by a person who, at the time of contracting, did not profess to act on the principal's behalf.
Held
- The House of Lords held that there was no valid ratification and the principal was not liable. A contract made by a person intending to contract on behalf of a third party, but without communicating that intention to the other contracting party, cannot afterwards be ratified by that third party so as to bind him. Ratification presupposes that the act was done in the name of, or on behalf of, the principal. Where the agent's intention remained locked in his own mind, there was nothing capable of being ratified.
Ratio Decidendi
Ratification operates retrospectively to supply authority for an act already professedly done on the principal's behalf. It cannot create an agency where none was asserted. To allow ratification of an undisclosed intention would permit a stranger's private state of mind to fix a contract on a person who was never held out as a party.
How to use it in an exam
- The controlling authority on the first condition of ratification under S.196 of the Indian Contract Act.
- State the condition precisely: the actor must have professed to act for the principal at the time of the act.
- Use to distinguish ratification from apparent authority under S.237, which does not require the agent to have professed agency.
- List alongside the other conditions: principal in existence and competent, full knowledge of material facts (S.198), whole transaction ratified (S.199), no injury to third parties (S.200), and the act must be lawful.
Source
Source: [1901] AC 240; leading authority on the first condition of ratification; citation and bench checked against Indian Kanoon and reported sources, audit of 12 August 2026
This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.