Representation and authorisation

When one person acts on behalf of another, this constitutes a representative relationship in the legal sense.

Representation can be divided into two types, depending on the awareness and assent of the representative with regard to the representation and on how the representation comes about:

  • Legal representation – requires no specification, because the representative has the respective right/obligation pursuant to law and regardless of whether he or she wishes it or not. Legal representation occurs, above all, within families. For example, a parent is the legal representative of his or her child under 18 years of age. The representative of a legal person, pursuant to law, is its management board.
  • Contractual representation – is excluded if there is no corresponding agreement between the representative and the principal; for example, the relationship between a lawyer and a client.

With a representative relationship it is important to keep in mind that even though it is the representative that acts, he or she does not create rights or obligations for him- or herself, but to the person whom he or she represents. The general regulation of representation is based on the General Part of the Civil Code Act (GPCCA).

The first and foremost requirement for representation is that the operation can even be performed through a representative. Operations that need to be performed in person, according to the law or an agreement, must not be done through a representative. Persons may agree among themselves on which operations must be performed in person. It is impossible to provide a list here. Personal operations pursuant to law include, for example, entering into marriage or making a will. This is because of the highly personal character of these operations. If the personal character of an operation is not derived from the law or an agreement, it may be based on the nature of the operation.

The right of representation is created by agreement in two cases, depending on the range of the addressees:

  • by authorisation to a particular person – the principal knows the representative well and provides a declaration of intention to a specific person;
  • by providing a declaration of intention to the public – the declaration of intention is provided to an unspecified group of people; for example, a notice about a lost dog in a newspaper.

Authorisation and the act of delegation

Authorisation is given with an act of delegation, which is important for furnishing evidence and fulfilling the principle of openness. An act of delegation proves that the representative has the right of representation, and third persons are able to rely on it. The law does not specify the form of an authorisation; instead, the general principle applies that the authorisation must be given in the same form as the operation for the performance of which someone is authorised. For example, all operations with immovable property must be notarised, meaning that an authorisation for concluding such an operation must also be notarised. In the absence of a written act of delegation an interpretation as to whether there is right of representation or not is needed. What is most important is that a third person must be able to reasonably understand the existence of the right of authorisation.

Extent of authorisation

The most reasonable course of action is to determine the extent of authorisation with an act of delegation. It is important to note that the limits of authorisation are set by the principal. If the extent has been determined in ambiguous terms, the understanding of the representative as to the content of the authorisation must first be considered. If the rights given to the representative are not clearly defined in the act of delegation, this may cause a lot of confusion – the representative might misunderstand the limits of his or her authorisation and overstep them; third persons might misinterpret the limits of authorisation as well. The extent of authorisation may be specified by law.

Termination of a representative relationship

A representative relationship is terminated when:

  • the representative has performed the operation for which the authorisation was given.
  • the performance of the operation for which the authorisation was given has become impossible.
  • the term of the authorisation expires.
  • circumstances arise that involve the termination of the authorisation.
  • the principal withdraws the authorisation,
  • the representative abandons the authorisation.
  • this follows from the operation that serves as the basis for the authorisation.
  • the contract on which the authorisation is based expires.
  • the principal dies.
  • the legal person that is either the principal or the representative is liquidated.
  • the principal is declared bankrupt.
  • another basis for terminating authorisation occurs, as provided by law.
  • the principal withdraws the authorisation. He or she may do this at any time and for any reason. To withdraw an authorisation, a declaration of intention must be made to the representative or to the public.

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Compiled by: Ministry of Justice