Business Contracts

Pursuant to Art. 1985 of the Civil Code, an agency agreement is, in principle, a consensual contract, the validity of which is not subject to any particular formalism, and which is formed only by the acceptance of the agent (Art. 1984, para. 2). Acceptance of the agency agreement, or power of attorney, may be express, as stipulated in article 1985, paragraph 1, according to which the agency agreement may be given by deed, private document, letter or verbally. Recalling this principle, the Court of Cassation overruled a court of appeal for holding that a lawyer had engaged his professional civil liability by disposing of sums intended for his clients, in the hands of an agent, without requiring a private deed empowering the latter to receive payment in their place, whereas the form of the agency agreement is unrestricted . Similarly, according to the Court of Cassation, a court of appeal cannot decide that the contract between the interested party and an undertaking is not a commercial agent's contract on the grounds that an exchange of correspondence between the parties does not amount to a written contract, since a commercial agent's contract is a consensual contract, which can be proved by any written document, when it is accepted by the co-contracting parties and indicates the capacity of each of the parties .

Acceptance by the agent may also be “tacit and result from its performance by the agent” (Art. 1985, para. 2). A wife who has been the undivided owner of the lots with her two children, since her husband's death, the latter having left the management of the undivided property to her without the specific appointment of a joint agent and the management company, informed of her husband's death, having sent her alone the invitations to the general meetings, is thus deemed to be a tacit agent . Similarly, the existence of a tacit agency agreement as representative of a group of undertakings entrusted with the implementation of airport development work can be deduced from the fact that the person in question was in possession of a letterhead of the group, from the fact that he was acting in his capacity as representative of the group, and from the fact that the project owner acknowledged this capacity . The form of the agency agreement is sufficiently flexible that a person to whom a power of attorney is given without the name of the agent appearing on it must be deemed to have received a mandate to choose the agent  without the validity of the contract being called into question. However, according to the Court of Cassation, the return by a son of the keys to the safe made available to his father by the bank on the latter's death does not establish the existence of a power of attorney in his favor to access the safety deposit box .

Interpreting Article 1984 broadly, even though it concerns the consent of the agent, the Court of Cassation overruled the decision of a court of appeal which had refused to recognize a doctor as the agent of his patient, on the grounds that it had failed to ascertain the tacit will of the patient/principal to grant him power of attorney . Like the agent's consent, the principal's consent can be inferred from the circumstances . The Court of Cassation thus upheld the trial court's decision to deduce the existence of an agency agreement, given by an insurance company to a broker, to immediately issue a cover note to a policyholder, from the fact that the broker in question had an ongoing business relationship with the insurance company, which supplied him with insurance application forms on its letterhead and instructed him to accept as the effective date of the contract the date requested by the client in the insurance application .

Cass. 1re civ, 15 March 2005, LawLex202200008851JBJ; Cass. 3e civ, 15 September 2010, LawLex202200009282JBJ, recalling that an agency agreement may be given by deed or by private deed, even by letter, but it may also be given verbally, and overruled an appeal decision which had rejected a project owner's claim for reimbursement of the fees of an engineer to whom he had entrusted a design mission for the construction of two villas, on the grounds that the fact that he was to occupy one of the villas in return for his work as delegated project owner implied that he had signed the design contract in his own name, whereas the delegated project owner was acting as the project owner's agent.

Cass. com. 19 January 1993, LawLex202200008646JBJ.

Cass. 3e civ, 12 March 1997, LawLex202300011752JBJ.

Cass. com, 3 March 2009, LawLex202300011810JBJ.

Cass. 1re civ. 28 February 1989, LawLex202200008850JBJ, holding that a court of appeal cannot declare a surety bond commitment null and void on the grounds that the notarized power of attorney does not mention the name of the agent, which is left blank, whereas the principal has the option of leaving the choice of agent to the person to whom the power of attorney is given.

Cass. com. 9 February 2016, LawLex202200002100JBJ.

Cass. 1re civ, 27 March 1979, LawLex202300007384JBJ.

Cass. 3e civ, 22 January 1974, LawLex202300011950JBJ, for the existence of an agency agreement tacitly given by a non-trading property company (société civile immobilière) to a contractor to enter into a contract for works and services (contrat de louage d'ouvrage) with a consulting firm, in the latter's name and on its behalf, deduced from the fact that the quotation required the consulting firm, designated as the “winning” undertaking, to lay out various buildings, with the property company having the latter draw up the final plans for the foundations.

Cass. 1re civ, 13 October 1981, LawLex202300011946JBJ See previously, Cass. 3e civ, 22 janvier 1974, LawLex202300011950JBJ, inferring the existence of a tacit agency agreement, having preceded the conclusion of a written agency agreement, from the fact that an approved broker for an insurance company had published an information and subscription brochure for a new financial product, presenting it as underwritten by said company being the addressee of any decision to be given by the policyholder, and including the address so that, for the same contract, he is acting as the agent of both the insurer and the policyholder.

474. Consensual contract (by principle)