• 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 Principal and from the consent of the Agent to act on behalf of the Principal.
      (2) The Agent has 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 Agent acts within the scope of its authority and a third party knew or ought to have known that the Agent was acting as an Agent, the acts of the Agent shall directly affect the legal relations between the Principal and the third party and, subject to Article 62(2), no legal relation is created between the Agent and the third party.
      (2) The acts of the Agent shall affect the relations between the Agent and the third party, where the Agent with the consent of the Principal undertakes to become the party to the contract.

    • Article 63 - Agency undisclosed

      (1) Where an Agent acts within the scope of his authority and the third party neither knew nor ought to have known that the Agent was acting as an Agent, the acts of the Agent shall affect the relations between the Agent and the third party, but the relations between the Principal and the third party shall only be affected under the conditions set out in paragraphs (2) and (3) of this Article.
      (2) If the Agent becomes 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's demand, the Agent shall communicate the name and address of the third party to the Principal; and
      (B) the Principal may 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 Agent becomes 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 Agent shall communicate the name and address of the Principal to the third party; and
      (B) the third party may exercise against the Principal the rights the third party has against the Agent, subject to any defences which the Agent may 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 Agent and to the third party or Principal, respectively. Upon receipt of the notice, the third party or Principal is no longer entitled to render performance to the Agent.

    • Article 64 - Agent acting without or exceeding his authority

      (1) Where an Agent acts without authority or exceeds his authority, his acts do not affect the legal relations between the Principal and the third party.
      (2) However, where the Principal causes the third party reasonably to believe that the Agent has authority to act on behalf of the Principal and that the Agent is acting within the scope of that authority, the Principal may 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 Agent that 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 Agent had acted with authority and not exceeded his authority.
      (2) However, the Agent is not liable if the third party knew or ought to have known that the Agent had no authority or was exceeding its authority.

    • Article 66 - Duties of an Agent

      An Agent shall 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's consent;
      (5) duty not to compete as to the subject matter of the agency;
      (6) duty not to act for a Person with conflicting interests; and
      (7) duty not to use or disclose confidential information belonging to his Principal or 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 Agent involves the Agent in a conflict of interests with the Principal of which the third party knew or ought to have known, the Principal may avoid the contract. The right to avoid is subject to Articles 38, 40, 41 and 42.
      (2) However, the Principal may not avoid the contract:
      (A) if the Principal had consented to, or knew or ought to have known of, the Agent's involvement in the conflict of interests; or
      (B) if the Agent had disclosed the conflict of interests to the Principal and the latter had not objected within a reasonable time.

    • Article 68 - Sub-agency

      An Agent has implied authority to appoint a sub-agent to perform acts which it is not reasonable to expect the Agent to perform itself. The provisions of this Part 7 apply to the sub-agency.

    • Article 69 - Ratification

      (1) An act by an Agent that 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 Principal specify a reasonable period of time for ratification. If the Principal does not ratify within that period of time he can no longer do so.
      (3) If, at the time of the Agent's act, 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 Principal indicate his refusal to become bound by a ratification.

    • Article 70 - Indemnification

      Where an Agent makes a payment on behalf of the Principal or suffers a loss which it is fair that the Principal should bear the Principal shall be subject to a duty to indemnify the Agent.

    • Article 71 - Affirmation

      A Person may 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's interests;
      (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.