Part 7: Part 7: Agency
Article 61 - Authority of Agents(1) This Part governs the relationship which results from the consent of one
Person("the Principal") that another Person(the " Agent") may act on behalf of the Principaland from the consent of the Agentto act on behalf of the Principal.(2) The Agenthas authority to perform all acts necessary in the circumstances to achieve the purposes for which the authority was granted.
Article 62 - Agency disclosed(1) Where an
Agentacts within the scope of its authority and a third party knew or ought to have known that the Agentwas acting as an Agent, the acts of the Agentshall directly affect the legal relations between the Principaland the third party and, subject to Article 62(2), no legal relation is created between the Agentand the third party.(2) The acts of the Agentshall affect the relations between the Agentand the third party, where the Agentwith the consent of the Principalundertakes to become the party to the contract.
Article 63 - Agency undisclosed(1) Where an
Agentacts within the scope of his authority and the third party neither knew nor ought to have known that the Agentwas acting as an Agent, the acts of the Agentshall affect the relations between the Agentand the third party, but the relations between the Principaland the third party shall only be affected under the conditions set out in paragraphs (2) and (3) of this Article.(2) If the Agentbecomes insolvent, or if he commits a fundamental non-performance towards the Principal, or if prior to the time for performance it is clear that there will be fundamental non-performance:(A) on the Principal'sdemand, the Agentshall communicate the name and address of the third party to the Principal; and(B) the Principalmay exercise against the third party the rights acquired on the Principal's behalf by the Agent, subject to any defences which the third party may have against the Agent.(3) If the Agentbecomes insolvent, or if he commits a fundamental non-performance towards the third party, or if prior to the time for performance it is clear that there will be fundamental non-performance:(A) on the third party's demand, the Agentshall communicate the name and address of the Principalto the third party; and(B) the third party may exercise against the Principalthe rights the third party has against the Agent, subject to any defences which the Agentmay have against the third party.(4) The rights under Article 63(2) and (3) may be exercised only if notice of intention to exercise them is given to the Agentand to the third party or Principal, respectively. Upon receipt of the notice, the third party or Principalis no longer entitled to render performance to the Agent.
Article 64 - Agent acting without or exceeding his authority(1) Where an
Agentacts without authority or exceeds his authority, his acts do not affect the legal relations between the Principaland the third party.(2) However, where the Principalcauses the third party reasonably to believe that the Agenthas authority to act on behalf of the Principaland that the Agentis acting within the scope of that authority, the Principalmay not invoke against the third party the lack of authority of the Agent.
Article 65 - Liability of Agent acting without or exceeding his authority(1) An
Agentthat acts without authority or exceeds his authority is, failing ratification by the Principal, liable for damages that will place the third party in the same position as if the Agenthad acted with authority and not exceeded his authority.(2) However, the Agentis not liable if the third party knew or ought to have known that the Agenthad no authority or was exceeding its authority.
Article 66 - Duties of an Agent
Agentshall be subject to the following duties towards his Principal:(1) duty of care and skill;(2) duty of loyalty;(3) duty to account for profits;(4) duty not to act as an adverse party without the Principal'sconsent;(5) duty not to compete as to the subject matter of the agency;(6) duty not to act for a Personwith conflicting interests; and(7) duty not to use or disclose confidential information belonging to his Principalor disclosed to him by a third party in relation to his activities as an Agent.
Article 67 - Conflict of interests(1) If a contract concluded by an
Agentinvolves the Agentin a conflict of interests with the Principalof which the third party knew or ought to have known, the Principalmay avoid the contract. The right to avoid is subject to Articles 38, 40, 41 and 42.(2) However, the Principalmay not avoid the contract:(A) if the Principalhad consented to, or knew or ought to have known of, the Agent'sinvolvement in the conflict of interests; or(B) if the Agenthad disclosed the conflict of interests to the Principaland the latter had not objected within a reasonable time.
Article 68 - Sub-agency
Agenthas implied authority to appoint a sub-agent to perform acts which it is not reasonable to expect the Agentto perform itself. The provisions of this Part 7 apply to the sub-agency.
Article 69 - Ratification(1) An act by an
Agentthat acts without authority or exceeds his authority may be ratified by the Principal. On ratification the act produces the same effects as if it had initially been carried out with authority.(2) The third party may by notice to the Principalspecify a reasonable period of time for ratification. If the Principaldoes not ratify within that period of time he can no longer do so.(3) If, at the time of the Agent'sact, the third party neither knew nor ought to have known of the lack of authority, he may, at any time before ratification, by notice to the Principalindicate his refusal to become bound by a ratification.
Article 70 - Indemnification
Agentmakes a payment on behalf of the Principalor suffers a loss which it is fair that the Principalshould bear the Principalshall be subject to a duty to indemnify the Agent.
Article 71 - Affirmation
Personmay affirm an unauthorised action carried out on his behalf so as to treat the action as authorised.
Article 72 - Termination of authority(1) Termination of authority is not effective in relation to the third party unless the third party knew or ought to have known of it.(2) Notwithstanding the termination of his authority an
Agent:(A) remains authorised to perform the acts that are necessary to prevent harm to the Principal'sinterests;(B) shall remain under a duty of confidentiality to the Principal; and(C) shall remain under a duty to account for profits arising out of his agency.