Business Contracts

The obligation “to do” (positive performance obligation) referred to in Article 1984 of the Civil Code can be read in the light of other provisions of the Civil Code. Firstly, the agent must take care of the principal's “affairs”. Article 1987 of the Civil Code, which distinguishes between a special agency agreement (mandat spécial) and a general agency agreement (mandat général), specifies that a …

Performance obligation for third party

The obligation “to do” (positive performance obligation) referred to in Article 1984 of the Civil Code can be read in the light of other provisions of the Civil Code. Firstly, the agent must take care of the principal's “affairs”. Article 1987 of the Civil Code, which distinguishes between a special agency agreement (mandat spécial) and a general agency agreement (mandat général), specifies that a special agency agreement deals with one matter or certain matters only, whereas a general agency agreement deals with all the affairs of the principal . 

Article 1988, paragraph 1, of the Civil Code stipulates that agency agreements conceived in general terms cover only acts of administration. Paragraph 2 of this article adds that, in the case of sale, mortgage or any other act of ownership, the agency agreement must be express. The Court of Cassation has clarified that the principal may give the agent the power to contract loans in a general manner, without specifying which loans are involved .

In addition, Ordinance No 2016-131 of 10 February 2016, reforming the law of contracts, the general regime and proof of obligations, enshrined a right of representation in the Civil Code. New Article 1155 states that when the representative's power is defined in general terms, it covers only protective and administrative acts. Paragraph 2 specifies that when the representative's power is specifically defined, he or she may only perform acts for which he or she is empowered and those which are accessory thereto.

While, in accordance with the Civil Code, the obligation to do which is characteristic of agency agreements covers routine business matters (affaires), business administration (actes d'administration) and acts relating to ownership (actes de propriété), the Court of Cassation long ago established a criterion which, in particular, distinguishes agency agreements from contracts for services, which are also characterized by a positive performance-based obligation to do something .  In effect, the Court of Cassation specifies that an agency agreement is a contract by which one person gives another the power to represent him in order to perform a legal act on his behalf . It distinguishes between legal acts, which are the prerogative of agency agreements, and material acts, which are specific to contracts for services . For example, a contract by which a department store provides a sales assistant with a personalized space does not constitute an agency agreement, since the latter's employees perform only the material acts of presenting the products, and not the legal acts, on behalf of the department store .

The agent's obligation to do something is also limited. Article 1989 of the Civil Code stipulates that “the agent may not do anything beyond what is stated in his agency agreement: the power to settle does not include the power to compromise”. In order to carry out a legal act in the name and on behalf of the principal, the agent may certainly make concessions, but must never put the principal in a precarious situation. This is an important clarification, as it is the principal who is bound by the legal act performed by his or her agent .  

The draft reform of special contracts enshrines this case law, while at the same time refining it by recommending that Article 1984 be rewritten as follows: “An agency agreement, also known as a power of attorney, is a contract by which one person, the principal, empowers another, the agent, to enter into one or more legal acts in his name and on his behalf. These acts may be bilateral or unilateral, particularly within groups, with or without legal personality”.

Cass. com, 29 June 1993, LawLex202200006444JBJ, considering that the deed by which a shareholder gives power to another to represent him at the general meeting of a limited liability company for the purpose of discussing the agenda which, relating to the examination of “the activity of the company” over the past year and its “future prospects”, does not expressly provide for the dismissal of the managing director, does not preclude the agent from voting on behalf of the principal to terminate the managing director's term of office, provided that such a measure constitutes a possible sanction for the management of the company and determines its future prospects

Cass, 1re civ, 21 November 1995, LawLex202200008797JBJ, specifying that the principal may give the agent the power to contract loans in a general manner, without specifying which loans are involved.

Art. 1710 Civil Code: “ A contract for the hiring out of work (louage d'ouvrage) is a contract by which one of the parties undertakes to do something for the other, in return for a price agreed between them”.

Cass, 1re civ, 19 February 1968, LawLex202200003680JBJ.

Cass, 1re civ, 19 February 1968, LawLex202200003680JBJ; 28 November 2007, LawLex202200008816JBJ.

Cass. com. 8 January 2002, LawLex200200004597JBJ.

Art. 1998 Civil Code: "The principal is required to perform the commitments contracted by the agent, in accordance with the power given to him. 

He is only bound by what may have been done in addition, insofar as he has ratified it expressly or tacitly".

Business Contracts

461. Performance obligation for third party

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

461. Performance obligation for third party

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise