Ratification is a complex term with different meanings in different domains. Generally, it refers to the silent agreement of an activity by an authority. For example, let’s suppose you hire external help to deliver goods for the month. You don’t seek your employer's written approval, but the employer divides the pay between you and the external party at the end of the month. By doing so, they are validating your conduct and ratifying it.
Contractual ratification is similar. In this post, we'll explore contract ratifications and voting and when withdrawal is possible.
Technically, a contract refers to a written agreement between two parties. A spoken agreement is also a valid type of contract, but generally, it's a written and signed document that passes as a contract. Ratification in a contract implies that the terms and conditions of the contract have been approved by both parties and are now ready to be put into effect.
How is a ratified contract different from a signed contract? Technically, it's no different–it's just a gap in time. Both involved parties have agreed to the terms and conditions and are ready to act on them, but they are not yet legally bound to do so.
For example, two neighbors agree that the shared garage belongs to neighbor A for the first fifteen days of the month and belongs to neighbor B for the remainder of the month. This settlement was initiated in writing, negotiated by word, and now the current offering is agreed upon by both parties. After two months, neighbor A produces a document mentioning the said conditions. Both parties sign the document.
For two months, neighbor A and neighbor B had a ratified contract between them. Now, they have a signed contract. The signed contract empowers the involved parties to take legal action if one of the parties fails to comply.
Before we understand the conditions of withdrawal and alterations, let's quickly review how to ratify a contract and whether a recommended ratification contract requires good faith.
Read the entire contract thoroughly and determine if you agree with all the mentioned clauses. If you do not agree with a clause, propose an alternative. It's essential to know that you cannot ratify parts of a contract. If you don’t agree with even a single clause, a new contract with revised conditions will be required.
Conduct contract ratifications and voting at your company, and give your declaration of acceptance. You can do so in writing and simply by enacting the contract. Usually, contract ratification occurs when you're not physically present to sign the contract. Your representatives are there to take action on your behalf.
Prepare a signed contract or verification document to convert the ratified contract into an official contract. In some situations, it is favorable for both parties to avoid a signed contract, for example, when hiring by word of mouth. The employer doesn't have to pay employee taxes, and the employee isn't liable for income tax.
If you aren't sure about the agreement or don't agree with the terms and conditions spelled out, voice your opinion. If you stay quiet, it will be considered agreement–if it’s unacceptable for you to act on a ratified contract, then change your opinion. Once you give the impression that you agreed, stepping back makes you appear unreliable.
In short, yes–the ratification of a contract can be withdrawn, but it greatly depends on the type of contract and circumstances.
Say you're buying a property. You visit property A, negotiate with owner A, and agree on $200K. A ratified contract exists between you two. However, the next day, your real estate agent shows you another property that is a better deal. You buy it on the spot. Now, you do not have the budget for property A and you do not pursue the former deal. You've withdrawn ratification, and they cannot act against it. Technically, there is no major loss of assets for either party.
On the other hand, imagine you're a candidate interviewed by company A and have your first day scheduled at company A on the upcoming Monday. If you interview at company B and join company B instead of company A on the upcoming Monday, this is misconduct. Company A cannot take legal action against you since you did not sign a contract, but they may not negotiate with you in the future based on your actions.
For a better understanding of contract ratification, be sure to check out our post on hotel union contract ratification votes.