Bill of Exchange
Explanation
The law regulates the status of the commission agent (le commissionnaire) who contracts in his own name. This agent acquires the rights resulting from the contract. The agent is directly bound towards the persons with whom he contracts, as if the business concerned him personally.
The persons who contracted with the agent do not have the right to sue the principal (le commettant) directly. In return, these persons have the right to invoke against the agent all the defenses that arise from their personal relationship with him.
The internal relationship between the principal and the agent is subject to the rules of mandate (le mandat). These rules also apply to the relationship of the principal with the creditors of the agent.
The agent is obligated to execute the orders given to him personally. He may not delegate a third party unless the agreement or custom allows him to do so, or if circumstances compel him to make this delegation. If the delegation occurs in these permitted cases, the principal has the right to sue the third party directly.
The law imposes additional restrictions on the agent. He does not have the right to set himself up as a party against his principal except with the consent of the latter. Furthermore, he bears the risks of his business if he grants credit or advances money to a third party without the consent of the principal.
Official legal articles
Think deeper
Why do you think the law prevented the persons who contracted with the agent from suing the principal directly, and how is this related to the fact that the agent contracts in his own name?
Flashcards
Do the persons who contracted with the agent have the right to sue the principal directly?
They do not have the right to sue the principal directly.
What are the rules that apply to the relationship of the principal with the agent or his creditors?
The rules of mandate apply to it.
What is the basic principle in the execution by the agent of the orders given to him?
The agent must personally execute the orders given to him.
When does the agent have the right to delegate a third party?
If he is authorized by agreement or custom, or if circumstances compel him to make this delegation.
What is the right of the principal if the agent lawfully delegates a third party?
The principal has the right to directly sue the person whom the agent delegated for himself.
May the agent set himself up as a party against his principal?
He does not have the right to do so except with the consent of the principal.
Who bears the risks if the agent advances money to a third party without the consent of the principal?
The agent himself bears the risks of his business.
Practice questions
An agent contracted in his own name with a merchant to purchase goods. Who is directly bound towards this merchant?
The agent who contracts in his own name is directly bound towards the persons with whom he contracted as if the business concerned him personally.
Which of the following defenses does a third party have the right to invoke against the agent?
The persons who contracted with the agent have the right to invoke against him all the defenses arising from their personal relationship with him.
Circumstances compelled an agent to delegate a third party to execute the order of the principal. The third party made a mistake in the execution. What does the principal have the right to do?
If the delegation was due to compelling circumstances, the principal has the right to directly sue the person whom the agent delegated for himself.
An agent lent the buyer a sum of money to complete the transaction, and did not obtain the consent of the principal. Who bears the risks of this loan?
If the agent grants credit or advances money to a third party without the consent of the principal, he bears the risks of his business.
The agent wanted to buy for himself the goods that the principal commissioned him to sell. What is the legal condition for this?
The agent does not have the right to set himself up as a party against his principal except with his consent.
Case problems
Samir commissioned an agent to purchase building materials. The agent contracted in his own name with the supplier Fadi. The agent received the materials but did not pay the price to Fadi. Fadi decided to file a direct lawsuit against Samir (the principal) to claim the price. Will Fadi's lawsuit against Samir succeed?
Model answer
Fadi's lawsuit against Samir will not succeed.
The law stipulates that the agent who contracts in his own name is directly bound towards the persons with whom he contracted.
It also explicitly stipulates that these persons do not have the right to sue the principal directly.
Since the agent contracted in his own name with Fadi, Fadi does not have the right to sue the principal (Samir) directly, but rather he must sue the agent.
Self-grading rubric
Rami commissioned an agent to sell goods. The agent found a buyer, but the buyer requested to pay the price in installments. The agent agreed and advanced the value of the goods to the buyer without informing Rami or obtaining his consent. The buyer went bankrupt and did not pay the amount. Who bears the loss resulting from this action?
Model answer
The agent bears the loss resulting from this action.
The law stipulates that if the agent grants credit or advances money to a third party without the consent of the principal, he bears the risks of his business.
In this case, the agent advanced money to the buyer without obtaining the consent of the principal (Rami).
Therefore, the agent alone bears the risks of the buyer's bankruptcy and his failure to pay the amount.