What happens if an agent acts beyond their authority?

When an agent acts beyond their authority, the principal has the option to ratify the act, which means they can choose to accept the act as if it were performed within the scope of the agent’s authority. This ratification creates legal consequences retroactively, meaning that the principal can be bound by the agent's actions, even if those actions initially exceeded the authority granted.

This concept exists to provide flexibility in agency relationships. Sometimes, an agent may take actions that are outside their explicit authority, but these actions may turn out to be beneficial for the principal. By allowing for ratification, the law lets the principal decide whether to accept the benefits (or grant the authority retroactively) of the agent's actions.

The other choices do not capture the nuances of agency law as precisely. While there can be scenarios where the principal is liable or the agent cannot ratify their actions, the core principle of agency gives the principal the power to ratify acts taken on their behalf, whether or not those acts were initially authorized.