The rule and general principle in the proxy is that if the attorney acts legally with a third party, without a proxy or authorization from the principal, the effects of this disposal, which the proxy concluded with a third party shall not do not turn to the principal, even if the third party is bona fide, it is believed that the attorney works and acts within limits of his proxy, as stipulated in the different laws around the world, whether in Qatar or other countries.
The general principle of the proxy has regulated provisions of the Qatari Civil Law as contained in provisions of Article 716, which stipulates that “The proxy is a contract, under which the attorney is obligated to undertake a legal work in favor of the principal.”
In application of this general principle, Court of Cassation adjudged those effects of the disposal, which the attorney concludes with third party shall turn, beyond his proxy, to the principal. “It is established, according to the two Articles 699, 703/1 of Civil Law, that the proxy is a contract, under which the attorney is obligated to undertake a legal work in favor of the principal and that the attorney is obliged to implement the proxy within its determined limits and he shall not exceed this limits, and if the proxy exceeds them, the work undertaken by him shall not be enforceable to the principal.”
- (Civil cassation – challenge No. 7790, 74th judicial year, hearing of 4/4/2006)
- (Civil cassation – challenge No. 14058, 82nd judicial year, hearing of 21/1/2016).
Despite the foregoing, regardless of this rule and excluding this principle for a lot of matters, including considerations of the justice, practical necessities and stability of the transactions, the jurisdiction and jurisprudence have promoted, with their interpretative judgment, this Theory of Apparent Proxy, so what is mean by the Apparent Proxy? And what are conditions and implications of it? We answer to these questions in the following article as follows: –
First/ concept of the Apparent Proxy: the Apparent Proxy means presence of wrong outward appearance caused by the principal, which makes the bona fide third party deceived and conclude the disposal with the attorney that deals beyond limits of his proxy, and this bona fide third party thinks that he represents the principal, and in such case and beyond the general principle, which requires that effect of disposal of the attorney shall not turn to the principal without a proxy or he shall not exceed limits of his proxy, to the principal, so effect of the disposal, concluded by the apparent attorney, who exceeded limits of his proxy, turns to the principal based on the apparent proxy.
As an example for the wrong outward appearance arising out of the principal, a merchant may send one of his affiliates to collect a debt due to him or to buy a good with a credit price from another merchant again and again, and once this affiliates goes, without an authorization from his chief, to collect some debts from the other merchant or to buy this good with the credit price in his favor, without knowledge of his chief, so he suspend disbarment of the money, thinking that his chief his sent it, so effect of this disposal is transferred to the principal, namely the merchant or sent the money.
Moreover, the Egyptian Court of Cassation adjudged that: “It is established, according to the legal precedents of this Court that the disposals, which the attorney concludes beyond scope of his proxy shall not be enforceable to the principal, unless this latter conducts them. Beyond this principle, the apparent attorney is deemed a deputy for the principal, so the disposal, which attorney concludes shall be enforceable to the principal, as long as it is proved that a wrong outward appearance attributable to the principal arose and that the third party that dealt with the apparent attorney was fooled by the outward appearance of the proxy, and did not commit an error or default in the truth-seeking.
- (Civil cassation – challenge No. 1171 of 51st judicial year, hearing of 27/12/1984)
- (Civil cassation – challenge No. 630 of 39th judicial year, hearing of 22/11/1975)
It should be noted herein that Theory of Apparent Proxy is excluded from the aforementioned general principle and the exclusion shall not be expansively explained and shall not be measurable like every exclusion.
The legal basis of the apparent proxy belongs to the appearance and realization of the proxy factually, despite contradiction of the same with the truth. Accordingly, the same legal effects of the actual proxy arises, because the third party is bona fide and the principal shall bear consequences of his wrong outward appearance caused by him.
The law has regulated a protection for the third party that is fooled by these outward appearances, which caused for the thinking that there is an actual authorization between the apparent attorney and principal.
Second/ conditions of the apparent proxy:
The third party that deals with the proxy – shall be bon fide, and this third party, not the principal, bears burden of proof of his good faith.
The wrong outward appearance shall arise out of and be attributable to the principal shall would make the bona fide third party excused with respect to his thinking that he was deputizing for the principal, when he contracted with the attorney and that his proxy was valid and he did not exceed its limits.
These two conditions should be fulfilled together to enforce provision of the apparent proxy, but fulfillment of one of these two conditions only shall not be a justification for enforcement of idea of the apparent proxy.
Third/ implications of the apparent proxy: –
It is established, in accordance with the general rule, that the principal shall not be responsible for the error committed by his attorney towards third party, unless the law stipulates otherwise. However, Theory of Apparent Proxy imposes the principal’s responsibility to third party for the errors committed by his apparent attorney within scope of the negligence responsibility and in accordance with rules of the proxy.
The principal’s responsibareity for the error caused by him due to the wrong outward appearance arising out of him is to indemnify the bona fide third party and this indemnity is transfer and enforcement of effect of the contracting, which the third party concluded with apparent the attorney to the principal, even if there are not actual proxy or even if the principal exceeds limits of his proxy.
Provisions of the negligence responsibility shall be applicable to error of the principal, if disposal of the apparent attorney results in damages to third party if his error led to an error committed by the attorney, for example, error of the latter is resulting from instructions of the principal; whereupon the latter assumes the negligence responsibility to third party for a personal error, even if this error is caused by the apparent attorney.
Rules of the proxy regarding responsibility of the principal himself shall apply, but if disposal of the apparent principal results in damage to third party, if the apparent attorney commits a fraud or deception in the contracting concluded between him and third party, whereupon; the contract between the apparent attorney and third party shall be annullable and the latter may have recourse not only against apparent attorney, but also against the principal for the compensation in accordance with rules of the proxy.
In conclusion, responsibility of the principal arises on the grounds that put himself in circumstances, which made the third party things that there is an actual authorization between him and apparent attorney intentionally and inadvertently, so protection of the bona fide third party requires a compensation, if the bona fide third party suffered damages not only caused by the apparent attorney but also by the principal himself.
Through all the foregoing, concept of the apparent proxy and its conditions and implications become clear.