What term describes the situation in which a license holder acts for a principal without prior authorization but is later accepted?

The situation in which a license holder acts for a principal without prior authorization, but the principal later accepts the actions taken is known as agency by ratification. This concept arises when an agent's actions, which were not initially authorized by the principal, are subsequently approved or ratified by the principal.

In agency by ratification, the principal validates the unauthorized acts of the agent after the fact, which creates a binding agreement as if the principal had authorized the actions from the start. This can happen, for instance, when an agent makes a deal that the principal was unaware of and the principal afterwards agrees to be bound by that deal.

Understanding this concept is critical in the law of agency because it highlights the importance of the principal's acceptance in establishing the legitimacy of the agent's actions, even if those actions were not officially sanctioned at the outset.