law-ratification | contract formation meeting of the minds performance under the contract acceptance of benefits
ratification by accepting benefits of contract
RATIFICATION OF CONTRACT TERMS
"Ratification occurs when a party recognizes the validity of a contract by acting under it, performing
under it or affirmatively acknowledging it." Zieben v. Platt, 786 S.W.2d 797, 802 (Tex. App.-Houston
[14th Dist.] 1990, no writ).
Ratification occurs if a party recognizes the validity of a contract by acting or performing under the contract or by
otherwise affirmatively acknowledging it. Mo. Pac. R.R. Co. v. Lely Dev. Corp., 86 S.W.3d 787, 792
(Tex.App.-Austin 2002, pet. dism'd); Zieben v. Platt, 786 S.W.2d 797, 802 (Tex.App.-Houston [14th Dist.] 1990, no
writ); Wetzel v. Sullivan, King & Sabom, 745 S.W.2d 78, 81 (Tex.App.-Houston [1st Dist.] 1988, no writ). In other
words, if a party by its conduct recognizes a contract as valid, having knowledge of all relevant facts, it ratifies the
contract. Spellman v. American Universal Inv. Co., 687 S.W.2d 27, 29 (Tex.App.-Corpus Christi 1984, writ ref'd
n.r.e.); Motel Enters., Inc. v. Nobani, 784 S.W.2d 545, 547 (Tex.App.-Houston [1st Dist.] 1990, no writ). Any act
inconsistent with an intent to avoid a contract has the effect of ratifying the contract. Barker v. Roelke, 105
S.W.3d 75, 84-85 (Tex.App.-Eastland 2003, pet. denied); Old Republic Insurance Company, Inc. v. Fuller, 919
S.W.2d 726, 728 (Tex.App.-Texarkana 1996, writ denied). Whether a party has ratified a contract may be
determined as a matter of law if the evidence is not controverted or is incontrovertible. Roelke, 105 S.W.3d at
84-85.
Ratification occurs where: (1) there is adoption or confirmation by a person, (2) with knowledge of all
material facts, (3) of a prior act which did not then legally bind that person and which that person had the
right to repudiate. Vessels v. Anschutz Corp., 823 S.W.2d 762, 764 (Tex. App.-Texarkana 1992, writ
denied); see also Dhingra, 2001 WL 1136149, at *3.
Ratification of Post-Injury Arbitration Agreement by Accepting Benefits
In Re Weeks Marine, Inc. (Tex.App.- Houston [14th Dist.] Oct. 8, 2009)(Anderson)
(ratification of agreement to arbitrate by acceptance of benefits)(arbitration compelled by mandamus) (other
arbitration law cases from the Houston courts of appeals, confirmation of arbitration awards)
MOTION OR WRIT GRANTED: Opinion by Justice Anderson
Before Justices Anderson, Guzman and Boyce
14-09-00580-CV In Re: Weeks Marine, Inc
Appeal from 215th District Court of Harris County
Trial Court Judge: Steven Kirkland
Ratification of the lease
Even if the evidence had conclusively established constructive notice on the part of The Siblings, Texoma would
still have to show, under the terms of the 1998 lease agreement, that The Siblings accepted a renewal of the
lease agreement for the 2006-2007 term. Texoma argues that The Siblings accepted a renewal of the lease by
depositing the April 2006 rent check that Texoma sent to The Siblings, thereby ratifying the terms of the
lease.
The Siblings argues that there was no acceptance of the check, and thus no meeting of the minds, as required
to establish a binding contract. We find that there was disputed evidence with regard to whether The Siblings
accepted the April 2006 rent check with full knowledge of the facts. Thus, Texoma's legal sufficiency challenge
based on ratification is without merit.
Texoma Advertising Co., LP v. The Siblings, LLC (Tex.App.- Houston [14th Dist.] Jun. 16, 2009)(Yates)(lease
agreement for advertising disputed, actual or constructive knowledge, statute of frauds conveyance of interest in
real estate, ratification of disputed contract, acceptance of benefits under it with knowledge of its terms)
To establish the existence of a binding contract, Texoma had to establish that there was a meeting of the minds
with regard to the agreement; that is, there must be a showing that The Siblings had an intention of making the
contract. See Dhingra v. Mendelow, No. 14-00-00770-CV, 2001 WL 1136149, at *3 (Tex. App.- Houston [14th
Dist.] Sept. 27, 2001, no pet.) (not designated for publication) ("There can be no agreement when one party has
an intention to make it, but the other has not.").
Under the doctrine of ratification, any act based upon a recognition of the contract as existing or any conduct
inconsistent with an intention of avoiding it has the effect of waiving the right of recission. See Rosenbaum v.
Texas Bldg. & Mortgage Co., 140 Tex. 325, 167 S.W.2d 506, 508 (1943); Dhingra, 2001 WL 1136149, at *3.
Ratification occurs where: (1) there is adoption or confirmation by a person, (2) with knowledge of all material
facts, (3) of a prior act which did not then legally bind that person and which that person had the right to
repudiate. Vessels v. Anschutz Corp., 823 S.W.2d 762, 764 (Tex. App.-Texarkana 1992, writ denied); see also
Dhingra, 2001 WL 1136149, at *3.
After reviewing the evidence under the applicable standards of review, we find that there were fact issues to be
resolved by the trier of fact with regard to The Siblings' alleged acceptance of the April 2006 rent check. Texoma
sent the check to a post office box owned by Jackson Hewitt Tax Services. The check had no cover letter or other
notation on it explaining the purpose of the check. Nathaniel Hooten testified that he received the check, thought
it was for payment of tax services, and promptly deposited it into the bank account for the company that owned
the Jackson Hewitt tax franchise. Texoma is correct that the check was made out to The Siblings and that it was a
mistake for Nathaniel to deposit it in the Big 5 Investments bank account. However, Nathaniel explained that it was
very unusual for The Siblings to receive any checks (he was not aware of any prior checks), the check was
received during busy tax season, and he simply did not realize at the time that the check was made to The
Siblings. Nathaniel conceded that he contacted Texoma to determine the name of the signator on the check, but
he did not get any other information regarding the check. Once he realized what the check was for, a refund was
promptly issued to Texoma. Crediting the evidence that is favorable to the trial court's judgment, as we must, and
allowing issues of the credibility of the witnesses to be decided by the fact finder, legally sufficient evidence
supports an implied finding of fact that The Siblings did not accept by ratification the terms of the lease
agreement. The trial court thus could correctly conclude that there was no binding agreement between
Texoma and The Siblings.
EFFECT OF ACCEPTANCE OF BENEFITS UNDER THE CONTRACT AT ISSUE WITH KNOWLEDGE OF ITS
TERMS. Texoma argues that The Siblings' unexpressed mental thoughts or reservations regarding the check are
immaterial to the question of whether The Siblings accepted the rent check, citing Oram v. General Am. Oil Co. of
Tex., 513 S.W.2d 533 (Tex. 1974). In Oram, however, the defendant continued to accept payments even after
she learned of the true terms of the agreement. See id. ("She has been fully aware of the terms of the lease and
by continuing to accept the benefits of performance thereunder by the lessee, she has ratified and
affirmed the lease as her own act."). Once The Siblings learned the true nature of the April 2006 rent check,
The Siblings tendered a refund of the check to Texoma. Texoma's representative Cummins conceded that, had
The Siblings not deposited the check and instead returned it to Texoma, Cummins would have considered the
lease terminated. Here, The Siblings did not continue to accept benefits under the lease once it learned the full
facts.[5]
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