Business Contracts

In practice, the third party's legitimate belief in the appearance ratifies acts performed by the agent in the absence or beyond the scope of his powers of attorney, so that the principal is bound to perform them, even where he did not wish to do so. Thus, according to the Court of Cassation, the principal is bound when the agent may have given the impression to third parties acting in good faith  …

Effects

In practice, the third party's legitimate belief in the appearance ratifies acts performed by the agent in the absence or beyond the scope of his powers of attorney, so that the principal is bound to perform them, even where he did not wish to do so. Thus, according to the Court of Cassation, the principal is bound when the agent may have given the impression to third parties acting in good faith that he was an agent, even if he was not .

If, in principle, as stated by the Court, the principal is not liable to third parties for what the agent may have done beyond the scope of the authority given to him/her, this is not the case when it results from the circumstances, ascertained and fully considered by the trial judges, that the third party may have legitimately believed that the agent was acting by virtue of a mandate and within the limits of that mandate . In other words, an apparent agency gives effect vis-à-vis third parties to an act which, in principle, is null and void or unenforceable due to the irregular nature of the representation, by making the principal responsible for the commitments entered into by his pseudo agent, whether he wishes to be or not. Thus, the fact that an employment contract has not been signed by the manager of an undertaking, but by the managing partner of the undertaking, an apparent agent, does not affect its validity .  A broker who issues an insurance certificate to the insured in return for payment of the bonus is acting as the insurer's apparent agent, and the insurer is thus committed to the insured, since the issue of a certificate under these conditions constitutes a presumption of insurance . An advertising agency, having declared that it was acting as the agent of the departément council for a lessor of advertising space in the metro, obliges the département, the apparent principal, to pay the rental price of the advertising space, since the lessor could legitimately believe that the agency was acting on behalf of the département . The sale of an immovable property must also be considered complete if the purchasers were able to legitimately believe in the powers of the alleged agent . Similarly, the beneficiary of a promise to buy, who may have legitimately believed, on the basis of the appearance created, that he had contracted with the seller's agent, is entitled to claim restitution of the sum paid from the seller, should the sale not be implemented . It has even been ruled that the third contracting party can obtain restitution of the sums incurred as a result of the contract concluded with the apparent agent, and at the same time compensation for the premature termination of the same contract by the alleged principal . Taking the consequences of the application of the apparent agency a step further, the courts have also held that a borrower may exercise his right of withdrawal from the sale if he has the legitimate belief that the seller has the authority to commit the lender, and that the circumstances authorize him not to verify the exact limits of that authority, Thus, when a consumer accepts a credit offer through a garage owner, with a view to purchasing a vehicle, it is necessary to ascertain whether the garage owner cannot be regarded as the apparent agent of the credit organization with whom the borrower may validly exercise his right of withdrawal . However, the Court of Cassation has pointed out that the sole effect of an apparent agency is to oblige the principal to perform the commitments made to third parties by the apparent agent, but not to oblige the latter to do so .

To justify this solution, and hence the severity with which they treat the principal, the courts have sometimes stated that the person who has allowed the appearance of an agency agreement to be created is bound to perform the commitments entered into by the agent  or must compensate third parties for harm caused, as if he or she had been a genuine principal . However, the Court of Cassation has reiterated that a person who has remained completely unaware of the alleged semblance of an agency agreement, provided this can be established , cannot be held liable on the basis of an apparent agency agreement .

Cass. 3e civ, 1 July 1971, LawLex202200009573JBJ.

Cass. 1re civ. 4 November 1970, LawLex202200009748JBJ. 

Cass. com., 5 December 1989, LawLex202200009701JBJ.

Cass. 1re civ, 31 May 1983, LawLex202300012070JBJ.

Cass. com. 9 March 1999, LawLex202200009713JBJ.

Cass. com. 29 June 2022, LawLex202200009708JBJ.

Cass. soc. 15 June 1999, LawLex202300012075JBJ.

Cass. 1re civ, 1 June 1976, LawLex202300013721JBJ.

Cass. 1re civ. 11 February 1997, LawLex200300002915JBJ.

Cass. 1re civ, 6 January 1994, LawLex202300011877JBJ. See previously Cass. 3e civ, 2 October 1974, LawLex202300012039JBJ, holding that a notary whose conduct gave the purchaser reason to believe that he was acting within the limits of the agency agreement given by the vendor, commits the vendor by virtue of the agreement between his apparent agent and the purchaser; Cass. 1re civ, 14 December 1976, LawLex202300011911JBJ: a seller who, in the presence of his son, claims to be his wife's agent, and vouches for her signature on the deed of sale of an estate partly owned by the couple, has the appearance of a valid agent and commits his wife.

Cass. 1re civ, 4 November 1970, LawLex202200009748JBJ.

Cass. 1re civ. 3 May 1972, LawLex202300012047JBJ.

Cass. 1re civ. 12 February 1991, LawLex200500006238JBJ.

Cass. com, 21 March 1995, LawLex202200008686JBJ.

Business Contracts

506. Effects

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

506. Effects

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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