"A Principal Can Ratify an Agent's Contract That Was Done

question 137

Essay

"A principal can ratify an agent's contract that was done without authority as long as the agent makes it clear that they are entering into the contract 'subject the principal's ratification.'" Discuss the accuracy of that statement.

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Definitions:

Ownership Perspective

An approach or mindset focusing on the long-term benefits and responsibilities of owning an asset or investment.

GAAP

Generally Accepted Accounting Principles, a framework of accounting standards, principles, and procedures from which financial statements are prepared in the United States.

Cumulative

Pertaining to an aggregate or total amount added up over time, often used in context with dividends that are accumulated if not paid out.

Noncumulative

A term often used in dividends policy, indicating that if a dividend is not paid out, it doesn't accumulate for future payment.