CHAPTER 5: MANDATES
Introduction:
A) Mandate is a contract by which a person, the mandator, empowers another person, the
mandatary, to represent him in the performance of a juridical act with a third person,
and the mandatary, by his acceptance, binds himself to exercise the power.
B) Characteristics:
1- Objective:
Representation for legal acts
Protection due to incapacity
2- Formation:
Express or tacit
Tacit=acts or silence
3- Remuneration
Between two people = presumed free
Professional mandate = onerous (paid)
4- Scope:
Special mandates – for specific businesses
General mandate – for all businesses but simple administration
Express + inferred powers also
Professional mandates – inferred
Obligations between parties:
A) Mandatary Obligations:
1- Perform properly:
- Prudently & diligent (job done carefully and as best as possible)
- Honestly & faithfully
- No conflict of interest – acceptance of many mandates
2- Keep informed:
EX: you own a building and you hire someone to check rents
3- Personal performance:
- Perform in person unless authorized
- Appoint third person in urgency
Mandatary responsible for third part act
- assistance
remains liable to mandator for acts
4- Exercising powers:
- if many mandataries = act jointly + solidarily
5- Benefit from mandate:
- May not use information or property from mandate except if: mandatory
consents, law allows or mandate orders.
- May not use third party to benefit from mandate
6- Liability:
Set by law above (rules we talked about earlier in the chapter)
But can be reduced if gratuitous mandate (if mandate is free)
7- Closing of mandate
Render account + return property
Deduct + retain property until payment
B) Mandator obligations:
1. Cooperate:
- Help mandatary complete mandate
- Advance expenses + interest
2. Pay:
- Article 2150
- Even if mandate not successful, if no fault
3. Liability to mandatary:
i. If several mandators – solidarily
ii. Discharge once work completed (free them of liability)
iii. Injuries (Mandator has to pay the agent)
iv. Not liable to mandatary for acts outside mandate, EXCEPT:
- If approves
- Mandatary did not know mandate ended
- Acts more advantageous
Obligations towards third parties
A) Mandatary obligations
1. Mandator liable for acts/agreements
- EXCEPT if acts in own name
2. Personally liable if exceeds mandate
- EXCEPT if:
Mandator ratifies
Third party knew limits of mandate
B) Mandator obligations:
1. Mandator liable for acts
2. May repudiate (refuse to be associated with a substitute) substitutes and acts
3. Liable for acts after end of mandate
- Were necessary
- If third party did not know mandate ended
4. Liable for presumed Mandatary
5. Liable for injuries
- EXCEPT if outside mandate / own name
Dowell v. Hay-Ellis (notary):
Case Facts:
- Joseph in bankruptcy protection
- Dowell acts as front man to buy property for $15k
- Dowell mandates Joseph to manage property
- Monies set up in trust account managed by Ellis
- Ellis blindly signed off on every invoice from Joseph
- Dowell claims $69k in non-property related payments
Court Decision:
- Dowel was only front man
- But remained liable to creditors because he was the legal owner
- Found payments of unverified invoices
- Ellis actions contradict art. 2138
- Ellis was not prudent or diligent as mandatary (notary)
Wong v. Leung:
• Case Facts:
- Pak Sang Investments mandates Leung to manage 15 unite apartment building
- Mandated to collect rent, pay expenses and submit accounting reports
- Leung failed to deposit collected rents and pay gas bill
- Building was seized and sold to pay gas bill
- Remaining funds sent to Pak Sang in care of Leung who produced a fake letter with
these directions
Court decision:
- Leung failed on duty of:
1. Prudence diligence honesty and faithfulness
2. Providing information
3. Not using mandator property for personal benefit
- Leung failed the mandate “principle of confidence” the mandator has in the mandatary
- Confidence is heavier when mandator is more vulnerable due to lack of experience and
understanding.
- Ordered payment for building and rent.