Bruce,who works for Laura's used car dealership,forges Laura's name to two checks,cashes the checks,and deposits the funds into his own bank account.Later,Bruce's conscience starts to bother him and he confesses to Laura.Bruce promises to repay her if she will only give him some time.Laura wants to keep Bruce as an employee because he is great with sales,so she agrees to give him some time in which to repay her.Ten months later,Bruce gets angry with Laura because he thinks she cheated him on a commission and leaves town without ever reimbursing her for the checks.Laura tells the bank that she wants her account credited.The bank asks for your advice.What would you tell the bank,and why?

The best advice to the bank is that Laura ratified Bruce's action because she took no timely action to remedy the situation.If an agent is not authorized to sign a negotiable instrument on behalf of a principal,the principal will generally not be liable for the instrument.Consequently,the agent would be personally liable for the instrument.However,if the principal decides to ratify,or approve of,the unauthorized agent's signature,the principal will then become liable for the instrument,and the agent will escape personal liability.A principal can ratify the unauthorized signature of an agent by explicitly approving of the signature,doing nothing despite knowledge of the signature,or accepting the benefits associated with the signature.