TITLE XIV. AGENCY
Chapter 1. General provisions
Art. 2179 – Source of authority.
The authority to act on behalf of another may derive from the law or a contract.
Art. 2180 – Form of authority.
Where the law requires that a contract be made in a prescribed form, the authority to enter into such contract on behalf of another shall be given in the same form.
Art. 2181 – Scope of power of attorney.
(1) The scope of a power of attorney given by contract shall be fixed in accordance with the contract.
(2) Where the agent informs a third party of his power of attorney, the scope of his authority shall, as regards such third party, be fixed in accordance with the information given to him by the agent.
(3) The scope of a power of attorney shall be interpreted in a restrictive manner.
Art. 2182 – Extinction of power of attorney.
(1) Unless otherwise agreed, a power of attorney given by contract shall be extinguished where the principal or the agent dies, is declared absent, becomes incapable or is adjudged bankrupt.
(2) The provisions of sub-art (1) shall apply where a body corporate ceases to exist.
Art.2183 – Revocation of authority.
(1) The principal may at any time restrict or revoke, as regards third parties, the authority he gave to the agent to make contracts in his name.
(2) Any waiving of such right shall be of no effect.
Art. 2184 – Document to be returned.
(1) The agent shall upon the authority coming to an end return to the principal the document, if any, evidencing his authority.
(2) He may not retain such document until final settlement of his accounts or claims with the principal.
Art. 2185 – Loss of document.
Where the agent alleges to have lost the document evidencing his power, the principal may, at the expense of the agent, apply to the court to declare that the document is revoked.
Art. 2186 – Justification of authority.
Whosoever has dealings with an agent may at any time require him to produce a justification of his authority and, where his authority is evidenced by a document, to produce a copy of such document duly signed by the agent.
Art. 2187 – Conflicting interests.
(1) A contract mad by an agent in a case where his interests conflict with those of the principal may be cancelled at the request of the principal where the third party who entered into the contract knew or should have known of the conflict.
(2) The principal shall, within two years from his knowing of such circumstances, declare whether or not he intends to cancel the contract.
(3) The contract shall be cancelled where the third party concerned fails to declare his intention to be bound by the contract within two months from having been informed of the principal’s intention to cancel the contract.
Art. 2188 – Contract with oneself.
(1) A contract made by an agent may be cancelled at the request of the principal where the agent made the contract with himself, whether he acted on his own behalf or in the name of a third party.
(2) The provisions of sub-art. (2) and (3) of Art. 2187 shall apply in such case.
(3) Nothing in this Article shall affect the special provisions applicable to commission agents (Art. 2248 and 2252).
Art. 2189 – Complete agency.
(1) Contracts made by an agent in the name of another within the scope of his power shall be deemed to have been made directly by the principal.
(2) The principal may avail himself of any defect in the consent of the agent at the time of the making of the contract.
(3) Any fraud committed by the agent may be set up against the principal by the third party who entered into the contract with the agent.
Art. 2190 – Abuse or Lapse of power.
(1) Contracts made by an agent in the name of another outside the scope of his power may be ratified or repudiated at his option by the person in whose name the agent acted.
(2) The provisions of sub-art (1) shall apply where the agent acted under an authority which had lapsed.
Art. 2191 – Option of principal.
(1) The third party having entered into the contract with the agent may demand that the person in whose name the agent acted immediately declare whether he intends to ratify or to repudiate the contract.
(2) Failing immediate ratification, the contract shall be deemed to be repudiated.
Art. 2192 – Effect of ratification.
Where the contract is ratified, the agent shall be deemed to have acted within the scope of his power.
Art. 2193 – Effect of repudiation.
(1) The provisions of Art. 1808-1818 of this Code shall apply where the contract is repudiated.
(2) The third party having entered into the contract with the agent may demand that the damage caused to him by reason of his having in good faith believed in the existence of a valid authority be made good in accordance with the provisions of the following Articles.
Art. 2194 – Liability.
(1) The agent shall be liable to pay compensation to the third party in the case referred to in Art. 2193.
(2) The agent shall not be liable where he acted in good faith not knowing the reason by which his authority had come to an end.
(3) The principal shall in such case be liable to pay compensation.
Art. 2195 – Liability of principal
The principal shall be jointly liable with the agent where:
(a) he informed a third party of the existence of the power of attorney but failed to inform him of the partial or total revocation of such power; or
(b) he failed to ask the agent to return the document evidencing the power of attorney and failed to seek a judicial decision to the effect that such document was revoked; or
(c) he caused in any other manner, in particular by his statements, behaviour or failure to act, a third party to believe that the person with whom he was dealing was authorized to act on behalf of the principal.
Art. 2196 – Exclusion of liability.
(1) Except in cases of fraud, a third party who has dealings with the agent may not claim compensation from the agent on the ground that he acted outside the scope of his authority where such third party, prior to entering into the contract, took cognizance of the document evidencing the authority of the agent.
(2) A third party may not claim compensation where the personal qualifications of the person with whom he has dealings is not essential to him and the agent agrees to be personally bound by the act he has done on behalf of another.
Art. 2197 – Agent acting on his own behalf.
(1) An agent who acts on his own behalf shall personally enjoy the rights or incur the liabilities deriving from the contracts he makes with third parties, notwithstanding that such third parties know that he is an agent.
(2) Third parties shall in such case have no direct action against the principal and may only exercise against him, on behalf of the agent, the rights pertaining to the agent.
Art. 2198 – Rights of principal.
(1) Without prejudice to the rights of third parties in good faith, the principal may recover any movable which the agent acquired on his behalf while acting in his name.
(2) He may substitute himself for the agent with a view to enforcing the claims acquired on his behalf.
(3) The principal may not exercise his rights under this Article unless he discharges his obligations towards the agent.
Chapter 2. Agency
Art. 2199 – Definition.
Agency is a contract whereby a person, the agent, agrees with another person, the principal, to represent him and to perform on his behalf one or several legally binding acts.
Section 1. Formation and object of agency
Art. 2200 – Form of agency.
(1) Authority may be conferred upon an agent either expressly or impliedly.
(2) Where the act to be performed by the agent is under the law to be made in a prescribed form, such form shall be complied with in conferring authority upon the agent.
Art. 2201 – Acceptance of agency.
(1) Acceptance by the agent of his appointment may be either express or implied.
(2) The appointment as an agent shall be deemed to be accepted, unless it be immediately refuse, where it refers to functions which the agent carries out in an official capacity or professionally, or where he holds himself out publicly for such functions.
Art. 2202 – Scope of agency.
(1) Where the scope of the agency is not expressly fixed in the contract, such scope shall be fixed according to the nature of the transaction to which it relates.
(2) The agency may either be special for a particular affair or certain affairs only, or general for all the affairs of the principal.
Art. 2203 – General agency.
Agency expressed in general terms shall only confer upon the agent authority to perform acts of management.
Art. 2204 – Acts of management.
(1) Acts done for the preservation or maintenance of property, leases for terms not exceeding three years, the collection of debts, the investment of income and the discharge of debts shall be deemed to be acts of management.
(2) The sale of crops, goods intended to be sold or perishable commodities shall be deemed to be acts of management.
Art. 2205 – Special agency.
(1) Special authority shall be required where the agent is called upon to perform acts other than acts of management.
(2) The agent may not without special authority alienate or mortgage real estate, invest capitals, sign bills of exchange, effect a settlement, consent to arbitration, make donations or bring or defend an action.
Art. 2206 – Authority of special agent.
(1) Special agency shall confer upon the agent authority only to conduct the affairs specified therein and their natural consequences according to the nature of the affair and usage.
(2) An act performed by the agent outside the scope of his authority shall not bind the principal unless he ratifies it, or in accordance with the principles government unauthorized agency.
Art. 2207 – Obligation to ratify.
(1) The principal shall, where good faith so requires, ratify the act done by the agent notwithstanding that he departed from his terms of reference.
(2) The provisions of sub-art (1) shall apply where it is reasonable to admit that, in the circumstances, the principal would have extended the scope of the agent’s authority, had he been aware of the situation.
(3) The agent may not require the principal to ratify where, before acting, he had the possibility of securing authority from the principal or where, after having acted, he omitted forthwith to inform the principal.
Section 2 . Duties of agent
Art. 2208 – Strict good faith.
(1) The agent shall act with the strictest good faith towards his principal.
(2) He shall disclose to his principal any circumstance which would justify the revocation of the agency or a variation of its terms.
Art. 2209 – Effect.
(1) The agent shall act in the exclusive interest of he principal and may not, without the latter’s knowledge, derive any benefit from any transaction into which he enters in pursuance of his authority.
(2) He may not make use to the detriment of the principal of any information obtained by him in the performance of his duties as agent.
Art. 2210 – Accounts.
(1) The agent shall account to the principal for all sums received by him and all profits accruing to him in the course of his employment, notwithstanding that the sums he received were not owed to the principal.
(2) Where the agent converted to his own use monies he owed to the principal, he shall be liable for the payment of interest as from the day of such use, without it being necessary that notice be given to him.
Art. 2211 – Diligence required of agent.
(1) The agent shall exercise the same diligence as a bonus pater familias in carrying out the agency as long as he is entrusted therewith.
(2) He shall be liable for fraud and for defaults in the performance of his duties.
(3) Whosoever undertakes without consideration to act as an agent shall not be liable unless he has not applied to the affairs of the principal the same degree of care as to his own.
Art. 2212 – Non-liability of agent.
(1) Unless otherwise agreed, the agent, notwithstanding that he acted in his own name, shall not be liable to the principal for the performance of the obligation of the person with whom he contracted.
(2) The provisions of sub-art (1) shall not apply where he contracted with a person whose insolvency he knew or ought to have known at the time of the making of the contract.
Art. 2213 – Duty to account.
(1) The agent shall at any time account to the principal at his request for his management of affairs.
(2) He shall inform his principal without delay that he has accomplished his agency.
Art. 2214 – Approval of management.
(1) The principal shall be deemed to have approved the management of the agent where, after having received from him a statement thereupon, he remains silent for a longer period than warranted by the nature of the affair or usage.
(2) The provisions of sub-art. (1) shall apply notwithstanding that the agent departed from the instructions he received or exceeded the scope of his authority.
Art. 2215 – Delegation of authority. – 1. Possibility.
(1) The agent shall carry out the agency in person unless he was authorized by the principal to appoint a substitute.
(2) Such authorization shall be implied where from usage it appears a matter of indifference whether the agent acts personally or by deputy.
(3) The agent shall appoint a substitute, where the interest of the principal so requires, when unforeseen circumstances prevent him from carrying out the agency and he is unable to inform the principal of these circumstances.
Art. 2216 – 2. Liability of agent.
(1) The agent shall be liable for the acts of any person whom he appointed without authorization as his substitute as if they were his own.
(2) Where the agent has been authorized to appoint a substitute, he shall be liable only for the care with which he selected his substitute and gave him instructions.
Art. 2217 – 3. Relationship between the principal and the substituted agent.
(1) The relationship between the principal and the substituted agent shall be as though the substituted agent had received authority to act as agent directly from the principal, where the substituted agent had reasons to believe that the agent was authorized to appoint a substitute.
(2) In the contrary case, the provisions of Art. 2257-2265 shall apply.
Art. 2218 – Plurality of agents.
(1) Unless otherwise agreed, where several persons have been appointed as agents by the same instrument, the contract of agency shall not be effective unless it has been accepted by all the persons concerned.
(2) Where several persons have been appointed as agents by the same instrument, only the acts done by them jointly shall bind the principal, unless otherwise agreed.
Section 3. Duties of principal
Art. 2219 – Contractual remuneration.
(1) The agent shall be entitled to the remuneration fixed in the contract.
(2) The court may reduce the remuneration fixed in the contract where it appears excessive and out of proportion to the services rendered by the agent.
Art. 2220 – Remuneration not fixed by contract.
(1) In the absence of a stipulation in the contract, the agent shall not be entitled to remuneration unless he carried out the agency within the scope of his professional duties or where such remuneration is customary.
(2) Failing agreement between the parties, the court shall fix the remuneration in conformity with recognized rates and usage.
Art. 2221 – Outlays and expenses.
(1) The principal shall advance to the agent the sums necessary for carrying out the agency.
(2) He shall reimburse outlays made and expenses incurred by the agent in the proper carrying out of the agency.
(3) Interest on such outlays and expenses shall be due by the principal as from the day when they were incurred without it being necessary to place the principal in default.
Art. 2222 – Liabilities and damages.
(1) The principal shall release the agent from any liabilities which he incurred in the interest of the principal.
(2) He shall be liable to the agent for any damage he sustained in the course of the carrying out of the agency and which was not due to his own default.
Art. 2223 – Set-off.
(1) The principal may not refuse to pay the sums due by him to the agent under the pretext that the transaction was unsuccessful.
(2) He may set-off these sums against those owed to him by the agent, in particular by reason of the latter’s default in the performance of the agency.
Art. 2224 – Agent’s lien.
Until the payment of the sums due to him by reason of the agency, the agent shall have a lien on the objects entrusted to him by the principal for the carrying out of the agency.
Art. 2225 – Plurality of principals.
Where the agent has been appointed by several principals for a common affair, the principals shall be jointly liable to the agent for all the consequences of the contract.
Section 4. Termination of agency
Art. 2226 – Revocation of agency.
(1) The principal may revoke the agency at his discretion and, where appropriate, compel the agent to restore to him the written instrument evidencing his authority.
(2) Any provision to the contrary shall be of no effect.
Art. 2227 – Effect of revocation.
(1) The principal shall indemnify the agent for any damage caused to him by the revocation where such revocation occurs prior to the agreed date or under conditions detrimental to the agent.
(2) The principal shall incur no liability where the date was agreed upon in his own interest exclusively or he has a just motive for revocation.
Art. 2228 – Plurality of principals.
(1) Where the agent has been appointed by several principals for a common affair, the revocation of the agent may be effected only by all the principals.
(2) One of the principals may not without the others’ consent revoke the common agent unless such revocation is founded upon a just motive.
Art. 2229 – Renunciation of agent.
(1) The agent may renounce the agency by giving notice to the principal of his renunciation.
(2) Where such renunciation is detrimental to the principal, he shall be indemnified by the agent unless the latter cannot continue the performance of the agency without himself suffering considerable loss.
Art. 2230 – Death or incapacity of agent.
(1) Unless otherwise agreed, a contract of agency shall terminate by the death of the agent or where he is declared absent, becomes incapable or is adjudicated a bankrupt.
(2) The heirs or the legal representative of the agent who are aware of the agency shall inform the principal of these circumstances without delay.
(3) They shall, until such time as the necessary steps can be taken by the principal, do whatever is required in the circumstances to safeguard the principal’s interests.
Art. 2231 – Plurality of agents.
(1) Where several agents have been appointed for the same affair and are required to act jointly, any cause of termination of the agency occurring in respect of the person of one of the agents shall terminate the authority of all, unless otherwise agreed.
(2) The other agents shall notify the principal upon becoming aware of the cause of termination of the agency and shall in the meantime do whatever is required in the circumstances to safeguard the principal’s interests.
Art. 2232 – Death or incapacity of principal.
(1) Unless otherwise agreed, a contract of agency shall terminate by the death of the principal or where he is declared absent, becomes incapable or is adjudicated bankrupt.
(2) The agent shall in such event continue his management where he had commenced it and there is not danger in delay until the heirs or the legal representative of the principal are in a position to take it over themselves.
Section 5. Effect of agency as regards third parties
Art. 2233 – Application of rules on representation.
The legal relations of principal, agent and third parties shall be subject to the provisions of Chapter 1 of this Title (Art. 2179-2198).
Chapter 3. Commission
Section 1. Commission to buy or to sell
Art. 2234 – Definition.
(1) The commission to buy or to sell is a contract of agency whereby the agent, called the commission agent, undertakes to buy or to sell in his own name but on behalf of another person, called the principal, goods, securities or other fungible things.
(2) The rules governing agency shall apply to this contract subject to such special provisions and exceptions as are laid down in this Section.
Art. 2235 – Measures of preservation.
(1) The commission agent shall take all necessary steps for the preservation of the goods sent to him on behalf of the principal and safeguard the latter’s rights against the carrier when the goods seem to have been damaged or their arrival has been delayed.
(2) He shall forthwith notify these incidents to the principal, as well as the fact that the goods have not arrived.
(3) Such duties shall be carried out by a person notwithstanding that he has not accepted the commission, where the commission falls within his professional activity.
Art. 2236 – Sale of goods.
Where there is a risk that the goods consigned for sale will quickly deteriorate, the commission agent may and, where it is in the interest of the principal, shall have them sold with the assistance of the competent authorities at the place of their location.
Art. 2237 – Anticipated payment.
The commission agent shall act at his own risk where, without the principal’s consent. He pays the seller before delivery has taken place.
Art. 2238 – Sale on credit.
(1) The commission agent may grant time for payment to the buyer where such is the custom of trade at the place of sale and the principal has not given him contrary instructions.
(2) The commission agent who grants time for payment shall inform the principal as to the person of the buyer and the period of time granted for payment.
(3) Failing such notification by the commission agent, the transaction shall be deemed to be made on a cash basis and the provisions of the following Article shall apply.
Art. 2239 – Unauthorised Credit.
(1) Where the commission agent grants time for payment contrary to the instructions of the principal or usage, the principal may demand immediate payment.
(2) In such a case, the commission agent may retain the benefits he received in granting time for payment.
Art. 2240 – Guarantee given by commission agent.
(1) The commission agent shall be liable to the principal for the payment or the performance of other obligations by the persons with whom he contracted where he acted as del credere agent.
(2) Unless otherwise agreed, a commission agent entrusted with the purchase or sale of securities shall be deemed to be a del credere agent.
(3) A commission agent entrusted with the purchase or sale of goods shall be deemed to be a del credere agent where such is the custom of trade in the palce where he resides or where he guaranteed the solvency of the persons with whom he contracted.
Art. 2241 – Del credere agent.
(1) The del credere commission agent is a guarantor jointly liable with the person with whom he contracted.
(2) He shall in all cases be liable to the principal for the performance of the contract he entered into unless non-performance was due to the principal’s default.
Art. 2242 – Insurance.
The commission agent shall not be bound to insure the goods unless the principal instructed him to do so.
Art. 2243 – Remuneration of commission agent.
(1) Where the remuneration of the commission agent has not been agreed upon between the parties, it shall be fixed in accordance with the custom of the place where the contract was entered into by the commission agent.
(2) Failing such custom, the court shall fix it on the basis of equity having regard to the work performed by the commission agent, the expenses he incurred and the risks he assumed.
(3) Where he acted as del credere agent, the commission agent shall be entitled to a special remuneration to be fixed under the terms of the contract or in accordance with usage or equity.
Art. 2244 – When remuneration is due.
(1) The commission agent shall be entitled to his remuneration for a specific transaction entrusted to him where the transaction is completed or where failure to complete it is due to a reason attributable to the principal.
(2) He shall not be entitled thereto where the transaction was not completed for other reasons, subject to any contrary usage in the place of his professional activity.
Art. 2245 – Forfeiture of right to remuneration.
(1) The right to remuneration shall be forfeited where the commission agent acts dishonestly towards the principal.
(2) It shall be forfeited in particular where he pretends that he purchased at a higher price or sold at a lower price than he actually did.
Art. 2246 – Outlays and advances.
(1) The commission agent shall be entitled to be reimbursed with interest all outlays and advances made by him in good faith to carry out the transactions entrusted to him by the principal.
(2) Unless otherwise agreed, such reimbursement shall be due to him notwithstanding that the transaction entrusted to him could not be effected.
Art. 2247 – Lien.
(1) The commission agent shall have a lien for the payment of the sums due to him by the principal.
(2) He may exercise this right on all goods in his possession which he was instructed to buy or to sell on behalf of the principal.
(3) He may exercise it on the monies he received from a buyer for the principal.
Art. 2248 – Dealings on own account.
(1) The commission agent entrusted with the sale or purchase of goods quoted on the Stock Exchange or having marker value may, in the absence of contrary instructions by the principal, effect the transaction as a third party on his own account and conclude the contract with himself.
(2) In such a case, he shall remain entitled to the remuneration agreed upon or resulting from usage.
(3) The price fixed for the transaction may not be less than the price intimated to him by the principal nor than the price quoted on the Stock Exchange or the market price.
Art. 2249 – Presumption.
Where the commission agent who is himself entitled to act as buyer or seller notifies the principal of the carrying out of a transaction without naming the person with whom he contracted, he shall be deemed to have assumed the obligations of buyer or seller on his own account.
Art. 2250 – Termination of commission.
The commission shall not terminate where the principal or the commission agent dies, becomes incapable or is declared absent where the heirs or representatives of the principal or commission agent continue his commercial activity.
Section 2. Forwarding agency
Art. 2251 – Forwarding agency.
(1) The forwarding agency is a contract of agency whereby the agent, called the commission agent, shipper or forwarding agent, undertakes to enter in his own name but on behalf of another person, called the principal, into a contract for the forwarding of goods.
(2) The rules governing the contract of commission to buy or to sell shall apply to this contract.
Art. 2252 – Insurance and dealings on own account.
(1) Unless otherwise agreed, the forwarding agent shall not be bound to insure the goods.
(2) He may himself undertake to effect their transport.
(3) In such a case, he shall have the same rights and duties as a carrier.
Chapter 4. Authority granted by the court
Art. 2253 – Principle.
The authority to do an act or acts of a certain kind on behalf of another may be given by the court to a person hereinafter called the curator.
Art. 2254 – Application for appointment.
(1) An application for the appointment of a curator may be made to the court by a relative or by the spouse of the person to be represented.
(2) It may be made by no other person.
Art. 2255 – Decision of the court.
(1) The court shall not grant the application unless the person to be represented is not in a position to appoint an agent by reason of his being away, ill or for any other cause.
(2) The court shall authorize the curator it appoints to carry out such acts as are of an urgent nature.
(3) The court shall make such order as it thinks fit to safeguard the interests of the person represented and to ensure that the curator will execute any sentence that may be passed upon him in relation to his liabilities to the person represented.
Art. 2256 – Effect.
(1) The curator appointed by the court shall as soon as possible inform the person whom he represents of his appointment.
(2) The respective rights and obligations of the person represented and the curator appointed by the court shall be subject to the provisions of Chapter 2 of this Title (Art. 2199-2233).
Chapter 5. Unauthorized agency
Art. 2257 – Scope of application.
Unauthorized agency occurs where a person who has no authority to do so undertakes with full knowledge of the facts to manage another person’s affairs without having been appointed an agent.
Art. 2258 – Management against principal’s will.
(1) Where the management was undertaken against the principal’s will, the provisions relating to unlawful enrichment and, where appropriate, those relating to extra-contractual liability shall apply (Art. 2027-2178).
(2) The provisions of this Chapter shall not apply in such a case unless the principal ratifies the acting person’s management.
Art. 2259 – Management not undertaken in the principal’s interest.
(1) Where the management was undertaken by the acting person in his own interest and not in that of the principal, the provisions relating to unlawful enrichment and, where appropriate, those relating to extra-contractual liability shall apply (Art. 2027-2178).
(2) The provisions of this Chapter shall apply where the acting person managed the other party’s affair at the same time as his own by reason of the fact that both affairs were so closely connected together that one of them could not be managed separately.
Art. 2260 – Duties of acting person.
(1) The acting person shall as soon as possible inform the principal concerned in the affair that he has undertaken the management.
(2) He shall continue the management undertaken by him and bring it to completion as long as the principal concerned in the affair is not in a position to take it over himself.
(3) He shall be subjected to the same rules as an agent as regards the duty to render accounts (Art. 2213 and 2214).
Art. 2261 – Diligence and liability.
(1) The acting person shall manage the affair he has undertaken with the same care as a bonus paterfamilias.
(2) The court may, having regard to the circumstances that induced him to undertake the management, reduce the damages to which he may be liable owing to his default .
Art. 2262 – Disability of acting person.
Where the acting person was under a disability as to contracting, he shall only be liable to the extent of his enrichment or the benefits with which he parted in breach of good faith.
Art. 2263 – Good faith.
(1) The acting person shall act with the strictest good faith towards the principal.
(2) The provisions governing agency shall apply in this respect (Art. 2208-2212).
Art. 2264 – Duties of principal.
(1) Where the principal’s interest required that the management be undertaken, he shall ratify the acts done by the acting person in his name.
(2) He shall indemnify the acting person for all liabilities he personally undertook, reimburse him the expenses incurred in his interest and compensate him for any damage he suffered in connection with the management and not due to his default.
(3) Expenses made by the acting person shall produce interest as from the day they were made without it being necessary that the principal be placed in default.
Art. 2265 – Effect of ratification.
Where the principal is bound by law to ratify the transaction or he in fact ratifies it, the provisions governing agency shall apply (Art. 2233).