Anyone who appreciates the expression that hell is paved with good intentions will perhaps find a good illustration of this in the new article 1161 of the Civil Code.
According to this “ A representative cannot act on behalf of the two parties to the contract or contract on his own account with the person represented.
In these cases, the act performed is void unless the law authorizes it or the person represented has authorized or ratified it ”.
This provision, which appears among those that have come to define a general system of representation, whether legal, conventional or judicial, pursues in a very commendable way the objective of preventing, in the conclusion of a contract, any conflict of interest due to a single representative.
However, it can only cause, especially in business life, questions and even concerns.
This results in a prohibition:
- Either the representation of both parties to a contract by the same representative,
- Either the conclusion of a contract by two parties, one of which would represent the other, and this in the absence of either legal authorization or prior authorization or ratification by the person represented.
However, the scope of this prohibition is not easy to assess in several respects.
Firstly, insofar as it falls within the framework of the general system of representation established, the question arises of its specific application to the representation of legal persons and even more specifically of companies.
Unless it is considered that common company law would include an authorization in principle for the representative to act in the name of two companies or to contract personally with a company of which he would be the representative, the application of article 1161 would lead to the necessity that a prior authorization is given to it or that a ratification intervenes in such hypotheses.
Paradoxically then, the question would arise of the relevance of the survival of the provisions organizing for certain companies a specific protective regime, namely that of the so-called regulated agreements since the said protection would therefore be generalized.
Secondly, there is the question of knowing to which cases article 1161 of the Civil Code really applies.
The wording of the latter in fact provides that the prohibition it enacts would apply to cases in which the representative acts on behalf of the two parties to the contract and not of two parties to the contract.
Should it be considered that when the contract comprises more than two parties, the said prohibition would cease?
Similarly, would the said prohibition not apply when the representative acts on behalf of more than two parties? It seems that such exclusions, if they could proceed from a literal reading of the provision in question with regard to its wording, would clearly not be in keeping with its spirit.
Thirdly, the established nullity regime is not specified.
It would seem reasonably possible to consider that it would only be a matter of relative nullity, since the prohibition laid down only tends to protect a particular interest, that of the person represented.
Which, among other aspects of the regime of such nullity, would allow the confirmation by the principal of the contract, in the absence of prior authorization or ratification.
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Article 1161 of the Civil Code unquestionably establishes a form of restriction on a representative's power of representation which, in particular given the uncertainties underlined, requires a certain degree of caution until its regime has been clarified.
Morgan James
