Agency
In Michigan, ratification of an agent's unauthorized act occurs when:
ALARA approves the agent's conduct
BThe principal accepts the benefits of the unauthorized act with full knowledge✓ Correct
CA court orders the principal to honor the agreement
DThe agent discloses the unauthorized action within 24 hours
Explanation
Ratification occurs when the principal, with full knowledge of the unauthorized act, accepts its benefits. This retroactively authorizes the agent's action, creating the same legal effect as prior authority.
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Key Terms to Know
Agency
A legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.
Fiduciary DutyThe highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.
Listing AgreementA contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
Dual AgencyA situation where a single real estate agent or brokerage represents both the buyer and the seller in the same transaction.
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