Mrs Lam works as a dealer selling sports equipment. Mary was employed as an accounting clerk by Mrs Lam at her Mongkok Branch. Without obtaining approval from Mrs Lam, Mary ordered dozens of badminton rackets on behalf of Mrs Lam at a special discounted price of $1,000 each from Champion Store. When the rackets were delivered, Mrs Lam was angry to know that it was ordered by Mary without her approval. On the same day, one of Mrs Lam’s customers, Shelly, ordered two dozen of badminton rackets from her. In response to Shelly’s order, Mrs Lam delivered the Champion badminton rackets purchased by Mary to Shelly. Yesterday an invoice from Champion Store on the rackets ordered was received by Mrs Lam. 

Required:

(a) Explain the concept of ratification of contract based on the law of agency. Discuss whether Mrs Lam is liable to pay for the invoice she received from Champion Store.

(b) Suppose Shelly had not placed an order with Mrs Lam and Mrs Lam had not resold the rackets, is Mrs Lam liable to pay for the rackets ordered by Mary?

Answer rating: 100% (QA)

The doctrine of ratification comes into play when a person has done an act on behalf of another without his knowledge or consent The doctrine gives the person on whose behalf the act is done an option ... View the full answer