Those who appreciate the expression that the road to hell is paved with good intentions might find a fitting illustration in the new Article 1161 of the Civil Code.
According to this article, " An agent may not act on behalf of both parties to a contract, nor contract on their own behalf with the represented party.
In these cases, the act performed is void unless authorized by law or the represented party has authorized or ratified it ."
This provision, which is part of those defining a general framework for representation—whether legal, contractual, or judicial—laudably pursues the objective of preventing any conflict of interest arising from a single representative in the conclusion of a contract.
However, it inevitably raises questions and even concerns, particularly in the business world.
Indeed, it results in a prohibition:
- This involves the representation of both parties to a contract by the same representative
- Either the conclusion of a contract by two parties, one of whom would represent the other, and this in the absence of either authorization by law, or prior authorization or ratification by the represented party.
However, the scope of this prohibition is not easy to assess for several reasons.
First, insofar as it falls within the framework of the general regime of representation, the question arises as to its specific application to the representation of legal entities, and even more specifically, of companies.
Unless one considers that general company law includes a general authorization for a representative to act on behalf of two companies or to contract personally with a company for which they are the representative, the application of Article 1161 would lead to the necessity of prior authorization or ratification in such cases.
Paradoxically, this would then raise the question of the relevance of maintaining the provisions establishing a specific protective regime for certain companies, namely that of so-called regulated agreements, since this protection would then be generalized.
Second, the question arises as to which cases Article 1161 of the Civil Code actually applies.
The wording of this provision stipulates that the prohibition it establishes applies only to situations where the representative acts on behalf of both parties to the contract, not just two parties.
Should we assume that the prohibition ceases as soon as the contract involves more than two parties? Similarly, would the prohibition not apply if the representative acts on behalf of more than two parties?
It seems that such exclusions, while they might stem from a literal reading of the provision in question, are clearly not in keeping with its spirit.
Thirdly, the regime governing the established nullity is not specified.
It would seem reasonable to consider it a relative nullity, since the prohibition aims only to protect a specific interest: that of the principal.
This, among other aspects of the regime governing such nullity, would allow the principal to confirm the contract in the absence of prior authorization or ratification.
*
Article 1161 of the Civil Code undoubtedly establishes a form of restriction on the power of representation of a representative which, in view of the uncertainties highlighted, requires a certain caution until its regime has been clarified.
Morgan Jamet
