The agent acts outside their agency agreement, but the principal agrees to the actions. This is an example of which type of agency?

In the context of agency law, when an agent takes actions outside the scope of their agency agreement but the principal later agrees to those actions, this is referred to as ratification. Ratification occurs when a principal affirms or approves the unauthorized acts of the agent after the fact, thereby giving those acts legal effect.

This concept is significant because it highlights the principle that while an agent must generally act within the authority granted by the principal, if the principal chooses to accept the actions taken by the agent that were not authorized initially, the principal can still be bound by those actions. Ratification can be explicit, where the principal clearly states their approval, or implicit, where their actions suggest acceptance of the unauthorized acts.

Understanding this helps clarify how agency relationships can be flexible, allowing for scenarios where an agent's actions can still lead to binding agreements if the principal consents to them later.