State with reason whether the following statement is correct or incorrect: \nRatification of agency is valid even if knowledge of the principal is materially defective.

Incorrect: Section 198 of the Indian Contract Act, 1872 provides that for a valid ratification, the person who ratifies the already performed act must be without defect and have clear knowledge of the facts of the case. If the principal’s knowledge is materially defective, the ratification is not valid and hence no agency.