15 September 2020, 12:58

Agent and messenger in the German civil law

Bogdan Shvets
Bogdan Shvets Aberschanskij & Kollegen

According to statistics of Ukrainian National Bank Germany is a top ten of country of Ukrainian export. Concerning import Germany is a top three. Therefore, the general knowledge about German law conceptions is quite important.         

Who concludes deals under German law shall keep in mind that not every representing person is an agent in the proper sense of the word. The person looking as a representative can prove to be simply a carrier of someone else's will, just a messenger. What is the difference? I try to give a short sketch of these legal doctrines as far as scope of the publication allows.

І. Agent

Agency is governed by section 164 of the German Civil Code (BGB). According with it a declaration of intent, which a person makes within the scope of his own power of agency in the name of a principal, takes effect directly in favour of and against the principal. Agency is not allowed for strictly personal transactions such as marriage or testament. According to German views, an agency must meet three criteria to engender legal consequences:

1. The agent always expresses his own will;

2. He must act on behalf of another;

3. He must act within the scope of power of agency.

The first requirement means the agent generates the declaration of intention personally instead of transmitting the will expressed previously by the person represented (principal). This is an important difference between an agent and a messenger.

The second requirement purposes to protect the counterparty, who must be able to know whom he enters into a transaction with. It is irrelevant whether the declaration is made explicitly in the name of the principal, or whether it may be gathered from the circumstances that it is to be made in his name. If an agent acts on behalf of a third party, but does not express this clearly, the transaction is considered to be concluded by him, therefore not by  a principal.

According to section 164 II BGB if the intent to act on behalf of another is not evident, the lack of intent on the part of the agent to act on his own behalf is not taken into consideration. In other words if the agent mistakenly declared that he was acting in his own name then he does not have the right to avoid the declaration of intent due to a defect of will expressed.

The transactions in which the counterparty does not carry who exactly the transaction is concluded with are considered as the exceptions. For example, shopping in the supermarket. It is of no interest to the seller (supermarket) whether the agent has announced or not that he buys products for principal.

The third requirement is the power granted by law or contract. There are the following types of agency by operation of law:

  • section 26 BGB - the power of the board to represent the association;
  • section 1626, 1629 BGB - the right of the parents to represent their children;
  • section 1793 BGB - the right  of the guardian to represent the ward;
  • section 1902 BGB - representation of the person under custodianship in court and outside court;
  • section 714 BGB - authority of a partner in the partnership (GbR) to represent the other partners in relation to third parties;
  • section 35 GmbHG - the right of directors (or shareholders) to represent LLC (GmbH);
  • section 78 AktG - the right of the management board to represent the stock corporation (AG) in courts and outside of court;
  • section  125 (161 II) HGB -  authority of the partners to represent the general partnership and partly limited partnership  - OHG (KG).

In case of contractual agency, we are talking about authority arising from agreement between principal and agent. Authority is the declaration of will that must be got by an addressee, it requires no acceptance. From there it is always a unilateral contract.

Authority can be generated:

- by declaration to the person to be granted authority (section 167 I Alt.1 BGB);

- by declaration to the third party in relation to whom the authority is to have effect (section 167 I Alt.2 BGB);

- by public notice  towards a indefinite circle of persons.

As a general rule there is no particular form required for authority. An exception is section 48 of German Commercial Code (HGB). It provides that the general commercial power of representation can be granted only by the owner of the commercial business or by his legal representative and only by means of an express declaration. For protective purposes, the courts proceed from the fact that the authority may require the same form as the transaction. For example if we are talking about the sale of a land plot, which requires notarization in itself, then the letter of authorization for such sale must also be notarized (German Supreme Court NJW 1979, S. 2306).

The expiry of the authority depends on the legal relationship on which its conferment is based. The authority is also revocable if the legal relationship is continued, unless this relationship leads to a different conclusion. If authority is granted by declaration to a third party, it remains in force in relation to this third party until he is notified by the principal of the expiry thereof.

In regard to a power of agency issued in the form of the letter of authorisation any third party has the right to trust this document so long it remains in a civil circulation. The power of agency remains effective until the letter of authorisation is returned to the principal or declared to be invalid, section 172 II BGB.

Entry into contract by an unauthorised agent is governed by sections 177, 178 BGB. If a person enters into a contract in the name of another without power of agency, then the effectiveness of the contract to the benefit or detriment of the principal requires the ratification of the principal. If the other party requires the principal to make a declaration as to whether or not he ratifies the contract, the declaration may only be made to that other party; a ratification or a refusal of ratification declared to the agent before the demand is without effect. The ratification may only be declared before the expiry of two weeks after receipt of the demand; if it is not declared, it is considered to have been refused. Until the ratification of the contract, the other party is entitled to revoke it, unless he knew of the lack of power of agency when he entered into the contract. The revocation may also be declared to the agent. Declaration of invalidity of the letter of authorisation may be done also by public notice, with the provisions of the Code of Civil Procedure (ZGB).

A distinction is made between the ostensible authority and  tolerance authority.

In the case of ostensible authority the person represented does not know that a third person, who has no authority, is acting on his behalf, but according to the circumstances or with the due care and diligence, should have known about this casus. This occurs when the “person represented” has endowed the ostensible agent (consciously or unconsciously) with a position that looks like the position of a representative in the eye of a third person. In this case, inter alia, the third party must act in good faith (not know that the alleged agent does not  have really any authority). Subject to these conditions the person represented will be bound by the obligations under the transaction concluded  by the ostensible representative. A classic example: a student, who loves antique cars, spends two to three days a week in the open area of ​​a firm that sells such kind of cars. The firm does not interfere with this. The student communicates with clients constantly and tells them enthusiastically about this or that brand. As a result buyers take him reasonably as an employee of the company. One day he has made a deal with the visitor. The firm is be obliged to deliver the car "sold by the agent".

Tolerance authority takes place where the person represented is aware of the actions of the person who acts on his behalf unreasonably (without authority) but does not interfere with such behaviour. In this case, the person represented is obliged as if he had really given the powers of agency to the agent tolerated. Like ostensible powers, tolerance authority is not a contractual representation in a pure form but engenders legal consequences for the person represented. 

II.    Messenger

In German Civil Law, the concept of an agent ("der Vertreter") is clearly separated from the concept of a messenger ("der Bote").

An agent is a person who always expresses his own will but on someone else's behalf and within the scope of the powers granted. The will expressed by the agent gives rise to legal consequences directly for the person represented by him, section 164 BGB.

Messenger, or nuntius in Latin, on the contrary, declares never its own will but only conveys someone else's will. The simple example: A asked B to buy some beer for him. B went to the shop, chose the brand, price, amount of beer and paid for it. In this case, B acted as a representative. The deal has been concluded only by his own declaration of will. B has defined all the essential terms of the deal personally. Principal A, however, has been bound by the obligation to pay. In the contrary example A asked B to go to the store and buy 2 bottles of "Belotserkivsky Ale" at a price of 2 euros. The declaration of will came from A. B has merely transferred it to a counterparty (to the store). In this case B acts messenger's part  but not an agent's one.

Any competent person can be an agent. A legally incapable person cannot be a representative, section 105 I BGB. There are no such restrictions for a messenger! The only thing that matters is the fact that the messenger has transferred someone else's will to the addressee. Even a very small child can act as a messenger. In our case - can go to the store and transfer the wish of a father to buy worldwide famous "Belotserkivsky Ale". Unlike the agency minority, status or incapacity of the messenger does not play any part.

As you can see messenger and the agent are clearly differentiated. The characteristic of such classification is the will expressed, declaratio voluntatis. In case of agency, the declaration of will always come from the agent. In the case of messenger this will always come from transaction party and does never from a messenger. According to German views declaratio voluntatis consists of both an objective and a subjective part (Palandt-Ellenberger, Einf. v § 116 Rn.16 ff). From the prospective of subjective theory, it is realized in Handlungswille, Erklärungsbewusstsein and Geschäftswille (Daniel Matthias Klocke, Erklärungsbewusstsein und Rechtsbindungswille –Willenserklärung und Rechtsgeschäft, 2014, s.16).

The first one (Handlungswille) is the will to take any action in this particular case generally. For example: an acceptance that has been expressed under hypnosis or as a result of a reflex movement of the hand (at an auction) engenders no legal consequences due to the lack of Handlungswille (the wish to act).

The second one (Erklärungsbewusstsein) is person's comprehension that his behavior can be understood by third parties as a wish to create legal consequences.

The third one (Geschäftswille) is the wish to come to very specific legal implications (to buy a specific car for example).

As you can see the messenger's idea rises from the absence of the components mentioned above.

Like a agent a messenger can take both an active and a passive part. In the first case messenger passes someone else's will on to the addressee or to the addressee's passive messenger. In the second case, messenger takes such will to transmit it later to the addressee (Münchener Kommentar zum BGB, Band 1, 6. Auflage, 2012/Schramm, Vor. § 164 Rn. 67). A passive messenger is a person acting in the “legal field” of the addressee. In a civil circulation, he is considered as a person who is able to get a declaration of will addressed to the transaction party. This can be the spouse, housekeeper or the addressee's driver etc. The offer (acceptance) received by the wife will be considered as received by the husband.

The perception of one or other person as a passive messenger follows the views of the good business practices. That means the passive messenger may not always be any person. The goal is absolutely clear: the addressee should not be responsible for the actions of a person who is outside of “addressee's legal circle”.

A declaration of intent got by an agent is considered to be got by the principal at the same moment in time. Thus, the transaction binds the principal just after acceptance has been received by his agent. In the case of messenger German law calls for the so-called "normal conditions". The declaration of intent is considered to be received by the addressee at the time it should have been received under normal conditions, even if it has not happened in reality. When the gardener comes once every three days then the expression of will received by him is considered to be received by the addressee during this period, even if the gardener has really forgotten to transfer this will to him. The addressee, not a sender, bearers the risk of the behaviour of his passive messenger.

On the other hand, any person can be the active messenger. This means the person who gives the sender's declaration to addressee may be a person not included in the sender's "circle". If the active messenger does not transfer the will to the addressee (or to the passive messenger of the addressee), the risk is assigned to the person who has declared the will.

Differentiation of between the agent and the messenger is governed by an interpretation. When it comes to whether your own declaration of intent or only a third party’s declaration has been given all circumstances of the individual case must be taken into account. The decisive factor is how acting person appears recognizable from the perspective of the addressee of the declaration.

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