Slide 1:

- Before we proceed with the analyzing the doctrines of R and AA, we must first look into
the doctrine of CM;
- The Doctrine of CM lays down 3 principles: 1. Concentration of the power to the board
of directors; 2. With the corporate powers vested in the BOD, just like ordinary powers
of a natural person, implied from this is the power to delegate or authorize another to
act on one’s behalf; 3. And behind this power of delegation is the intertwined principal-
agent relationship from which, the doctrines of R and AA are actually derived.

Slide 2:
- Let us now analyze the doctrine of ratification. But first, what is ratification? -Ratification is a
civil law concept related to the contract of agency, and its rule is laid down in Article 1910.
Basically, the article can be summed up by the statement “no authority; not binding” subject to
the exception of ratification.
Ratification is the act of adoption or confirmation of an act done on one’s behalf outside the
scope of his authority. It may be expressed or implied, and may take diverse forms.
-Further, an underlying principle in ratification is estoppel, a form of implied ratification. Under
estoppel, a person is prevented from retracting his own representation over which a person
acting in good faith has relied on. Or as the layman calls it - “touch move”

Slide 3.
Just read or skip

Slide 4
There are only specific persons who can ratify. Generally it is the principal, or the person who is
being represented by the agent. In the corporate setting, this may vary depending on who is the
delegating authority.

Slide 5
Aside from the specific persons who may ratify, another important consideration is the
circumstances present when making the ratification. Jurisprudence holds that in order to
appropriately ratify an act, the authorizing body or the principal must have full and complete
knowledge of the facts;

Slide 6
So the effect is simple, no authority, not binding.

Slide 7
So to summarize what weve discussed thus far, here are the following requirements. (READ)

Slide 8
So we now go to the Doctrine of AA. The principle underlying apparent authority, similar to
implied ratification, is estoppel. However, the subject of the estoppel differs from the two
principle. Later on we will highlight this, but for now – the doctrine of apparent authority is
clothing of an apparent power to a person such that another, who is exercising due diligence,
may prudently believe that such person is indeed authorized.

Slide 9
- So here, we shall discuss the principles behind AA. A very important consideration of AA
is the act of the principal. Without any act or OMMISSION giving indicia that another is
clothed with authority, the doctrine cannot apply.
- In analyzing whether there is AA, the basis should be whether the principal has vested
the agent/officer of the apparent authority. It is not the quanitity or number of similar
acts would be used.
- Lastly, during the course of the trial, it is incumbent upon a corporation to prove that its
agent has no authority before AA can be raised.

Slide 10 read