Where a person contracts, as an agent, on behalf of a named principal, without the authority of that principal (i.e. without express or implied authority) the contract may afterwards be ratified by the principal. In other words, the principal confirms and adopts the contract made on his behalf and at this point is now bound by the contract. Thus, it can be seen that the effect of ratification is to render the contract as binding upon the principal as if the agent had been properly authorised at the time of organising the contract. The agent must expressly have contracted as an agent. If he does not disclose his intention to act as agent to the third party ratification may be impossible. The contract can only be ratified by the principal who was named or ascertainable when the contract was made. The agent must actually have a principal who was in actual existence at the time of the contract. In other words, it is not sufficient that the principal was named or ascertainable when the contract was made, if that principal did not actually at that time exist. For example, where a person purports to act as agent for a company which is not yet formed, there can in fact be no ratification and the agent will be personally liable as if the contract were his own. The principal must have contractual capacity at the date of the contract and also have this capacity at the date of ratification