This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
An express approval of a contract, and an adoption of it, is of course a ratification. Acquiescence in the contract with full knowledge of the facts, amounts to ratification if the adversary party is thereby induced to perform the contract or otherwise alter his position in reliance upon such apparent ratification..1 Retaining the benefits of the unauthorized contract with full knowledge of the material facts is a ratification; as where the corporation receives and retains property2 or accepts services3 rendered thereunder. So allowing a default judgment to be taken on the unauthorized contract,4 or giving a note in renewal of an unauthorized note,5 amounts to a ratification thereof. The burden of showing a ratification of an unauthorized contract is on the party alleging it.6 Conduct on the part of a corporation without full knowledge of the facts does not amount to ratification, even if such conduct is of a character which would amount to ratification if full knowledge existed.7 Thus an unauthorized agreement by the secretary and treasurer to pay a commission if he secured a purchaser for certain property of the corporation is not ratified by the fact that the president of the corporation, without knowledge of such contract, joins with the assignee for the benefit of creditors in petitioning the court for a sale to a purchaser secured under such contract.8 So an unauthorized contract to pay the house rent of an employe, as well as his wages, is not ratified by payment of such wages if the corporation does not know of the agreement to pay house rent.9 Partial ratification is impossible.10
1 Smith v. Water-Works, 73 Conn. 626; 48 Atl. 754; National, etc., Association v. Bank, 181 111. 35; 72 Am. St. Rep. 245; 54 N. E. 619; Germania, etc., Co.'s Assignee v. Hargis (Ky.), 64 S. W. 516; Cadillac State Bank v. Heading Co., 129 Mich. 15; 88 N. W. 67; Seymour v. Association, 144 N. Y. 333; 26 L. R. A. 859; 39 N. E. 365; North Point, etc., Co. v. Utah, etc., Co., 16 Utah 246; 67 Am. St. Rep. 607; 40 L. R. A. 851; 52 Pac. 168.
2 Citizens' Gaslight Co. v. Wakefield, 161 Mass. 432; 31 L. R. A. 457; 37 N. E. 444.
3 Salem Iron Co. v. Iron Mines, 112 Fed. 239; 50 C. C. A. 213; Germania, etc., Co.'s Assignee v. Hargis (Ky.), 64 S. W. 516; Cadillac State Bank v. Heading Co., 129 Mich. 15; 88 N. W. 67; Webster v. Whitworth (Tenn. Ch. App.), 63 S. W. 290.
1 Domenico v. Packers' Association, 112 Fed. 554; Newport, etc.,
Co. v. Lunyon, 69 Ark. 287; 62 S. W. 1047; Blood v. Water Co., 134 Cal. 361; 66 Pac. 317; Mills v. Mining Co., 132 Cal. 95; 64 Pac. 122; Illinois, etc., Bank v. Ry., 117 Cal. 332; 49 Pac. 197; Streeten v. Robinson, 102 Cal. 542; 36 Pac. 946; Smith v. Water-Works, 73 Conn. 626; 48 Atl. 754; Marion Trust Co. v. Investment Co., 27 Ind. App. 451; 87 Am. St. Rep. 257; 61 N. E. 688; Neosho Valley Investment Co. v. Hannum, 63 Kan. 621; 66 Pac. 631; Herring v. Turnpike-Road Co. (Ky.), 63 S. W. 576; Nebraska, etc., Bank v. Ferguson, 49 Neb. 109; 59 Am. St. Rep. 522; 68 N. W. 370; Murray v. Beal, 23 Utah 548; 65 Pac. 726.
2 Mills v. Mining Co., 132 Cal. 95; 64 Pac. 122; Marion Trust Co. v. Investment Co., 27 Ind. App. 451; 87 Am. St. Rep. 257; 61 N. E. 688; Neosho Valley Investment Co. v. Hannum, 63 Kan. 621; 66 Pac. 631; Herring v. Turnpike-Road Co.