What does "ratification" in agency law refer to?

In agency law, "ratification" refers to the principal's approval of actions taken by an agent on their behalf, especially when those actions were performed without the principal's prior consent. This process is important because it allows a principal to validate the acts of an agent that were conducted outside the scope of their authority or without explicit permission. By ratifying the agent's actions, the principal effectively accepts and is bound by those actions as if they had authorized them from the beginning.

This concept is essential in ensuring that the principal can maintain control over their business decisions while also allowing for flexibility in how those decisions are executed. If a principal chooses to ratify an agent's actions, they are essentially affirming the relationship and the decisions made by the agent, making those actions legally binding.

The other options do not accurately reflect the concept of ratification. Termination of an agent's authority refers to ending the relationship, which is contrary to the idea of affirming actions. Revoking authority is also fundamentally different, as it implies taking away power rather than endorsing actions that have already been taken. Lastly, dispute resolution focuses on conflict management rather than the approval process inherent to ratification.