Jonathan was a used-car enthusiast. He entered into an agency agreement with Andrea. She owned a used car lot. The agency agreement limited Jonathan's authority to purchase used vehicles for less than $25 000 and to ship them by flatbed to Andrea's lot. When passing through Toronto one Saturday morning, Jonathan stopped at an auto auction and saw a 1985 Jaguar that he wanted to bid on for Andrea. He was successful and purchased the vehicle for $24 000. However, he had no flatbed trailer and as such decided to drive the vehicle to Andrea's lot in London. He immediately arranged for automobile insurance on her behalf but without her authority. Near Kitchener he was involved in an automobile accident which resulted in the Jaguar being a total write-off. No one was injured. He contacted Andrea and informed her of the situation. She immediately contacted the insurance company to ratify the insurance contract. In these circumstances:
◦ Andrea was unable to ratify the contract because at the time she attempted to do so, the accident had already occurred.
◦ because Jonathan had apparent authority to enter into the insurance contract, it is binding on Andrea.
◦ given that there was no personal injury, the insurance contract can be ratified.
◦ a principal can only ratify an agreement entered into by an agent if his or her name has not been used.
◦ so long as the initial call made by the agent was prior to the accident, the insurance contract can be ratified.
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Schengen Agreement