Ratified contracts are most commonly used in real estate and refer to a legally binding agreement that has been initially accepted by both the buyer and the seller, typically following negotiations and the signing of a purchase offer.

However, this contract may still be subject to certain contingencies or conditions, such as inspections, financing approval, or appraisal results.

Once these contingencies are met or waived, and both parties confirm their commitment to the terms, the contract is considered ratified.

At this point, it becomes a fully enforceable agreement, and any subsequent breach or failure to complete the transaction may lead to legal consequences.

Key takeaways:

  • A signed contract hasn’t necessarily been ratified.
  • You can ratify a voidable contract but not a void one.
  • Ratification requires agreement on all terms and conditions in the contract by all parties.
  • A ratified contract in real estate may need to go through several steps to finalize it.

What is a ratified contract?

You already know how satisfying it can be to agree on a contract.

There will often have been months of negotiation leading up to this pivotal point, and that moment when the contract is signed finally represents a successful conclusion.

Or does it? In fact, a signature is only one part of the end process, and that contract also needs to be ratified, from its contract effective date to any penalties imposed within.

But what does it mean to ratify a contract? Well, it all comes back to the T&Cs.

In essence, ratification means approving the terms and conditions that both parties have agreed to within the body of the contract.

It’s a final ‘stop and think’ opportunity that can lead to either a contract being refused or additional negotiations taking place.

When might I need a ratified contract/when are they used?

In reality, you’d use a ratified contract in any business situation where there may be conditions to agreement.

One of the most common scenarios is in real estate, where both the buyer and seller might have conditions that need to be fulfilled for the deal to be completed.

Real estate can be a complicated sector, but understanding the different real estate terms will help you end up with a solid and legally binding contract that both parties are happy with.

How to ratify a contract

A ratified contract doesn’t happen overnight.

Negotiations may be lengthy and complex, and a contract tracking system might come in handy.

The process is likely to look something like this:

1. Read

Read the contract carefully and then reread it, paying close attention to any terms and conditions.

2. Clarity

Have a clear idea of what it means to ratify a contract and remember you need to accept the whole contract, not just parts of it.

3. Acceptance

Be very clear about what constitutes accepting the contract. Will your acceptance be written or implied by your actions?

4. Legality

Be aware that once the contract has been fully ratified, you’re legally obligated to fulfill any terms you’re responsible for.

5. Dates

Remember that the date when a contract is ratified isn’t necessarily when it becomes valid.

If it’s already been signed, ratification makes it retroactively valid from the signing date.

6. Rights

Do you have the right to ratify the contract?

In some circumstances, such as with corporations, you may need others (e.g. shareholders) agreement, too.

7. Voluntary

The process of ratification must be entirely voluntary.

You mustn’t be coerced by another party to ratify the contract.

8. Right of refusal

To ratify a contract, you must agree to and accept all its terms and conditions.

If you disagree with any of them, you have the right to refuse to ratify it and can either go back to the negotiating table or walk away.

When is a contract considered ratified?

So, when is a contract officially ratified?

As far as contract law is concerned, this happens once the benefits or conditions contained within it have been accepted.

So, for example, if a real estate contract contains a clause that a property inspection must be carried out, that condition needs to be met before it’s considered ratified.

Can I ratify a voidable contract?

In short, “yes”.

Ratification is simply the end of the process where both parties agree on a contract’s terms and conditions.

This means that, with a voidable contract, the parties can jettison some or all of the old T&Cs and replace them with new ones that better meet both their needs.

Once the initial point of contention is gone, they should be left with terms that everyone is happy with.

The difference between voidable vs. void contracts

When one of the parties involved in a contract sees the terms and conditions and realizes there are some they didn’t know about or failed to fully understand, the contract becomes voidable — even if it’s already been signed.

They can then either renegotiate these terms or reject them altogether.

A contract can also become voidable if it’s discovered that one of the parties didn’t have the right to agree to some or all of the terms or wasn’t legally capable.

An example of this is if one party is viewed as a minor in the state the contract was agreed or if they lack the mental capacity to make rational decisions.

On the other hand, a void contract is always unenforceable by law.

This can cover a range of circumstances, such as one party dying or terms and conditions requiring either party to break state or federal law to fulfill the contract.

The primary difference to consider is that, with a voidable contract, you can correct any ‘mistakes’ during the ratification process — you simply need to identify the terms or conditions you’re unhappy with and then seek to rectify them.

This will likely involve ongoing negotiation until you have a unanimous agreement.

What happens after a contract is ratified in real estate terms?

As mentioned earlier, the real estate sector is one of the most common places to find ratified contracts.

After all, buying any type of property is a massive undertaking involving a lot of money.

Transactions may thus involve prolonged negotiations before moving to ratification.

When a real estate contract is ratified, it doesn’t mean the transaction is complete; it simply signals that both buyer and seller have agreed to the terms contained in it.

It’s also worth noting that the contract can be canceled prior to final execution.

As with other contract types, the various terms and conditions that need ratifying will vary, but common examples include:

Earnest money

A buyer will often pay this money to show they’re serious about buying the property.


Your potential new home may look lovely, but is it structurally sound? Does it have a pest problem?

There can be many hidden issues with a property, and buyers will usually insist on certain inspections being carried out before purchasing.


Is the property actually worth the asking price?

Having a property professionally appraised is essential to find this out. If you’re borrowing to buy, your lender will likely insist that an appraisal is carried out.


If you need to borrow to buy your chosen property, you’ll have to decide on a specific lender and commit to them.

It may also be the case that you seek out a bridging loan if you’re waiting on another property to sell.

Once a lender has agreed terms, they’ll provide a letter for the real estate agent.


Does your new property fall under the purview of a housing association or similar?

If so, you’ll need to be sure you meet any conditions they have, such as not allowing pets.


This is something you need to consider too, as insurance companies will likely want to inspect a property before issuing a policy.

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Contracts can be complex at every stage of their drafting, from initial negotiations to final agreement and ratification.

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