This authoritative reference work examines the laws, procedures, and apply relating to industrial agency and distribution agreements in 54 national jurisdictions worldwide. Some state and federal laws present that a company may be held criminally chargeable for the acts of its brokers or officers committed within the transaction of company business, since by legislation a company can solely act by way of its officers.
In distinction to this strategy, the extra fashionable codifications of Scandinavia and of such countries as Germany, Switzerland, Japan, Poland, Italy, and Greece draw a pointy distinction between the unilateral organizational act on the a part of the principal authorizing the agent to behave and the inner contractual relations between the principal and the agent.
The interior bilateral relationship between principal and agent—apart from company of necessity—rests upon what is commonly termed a contract of company.” This time period encompasses all types of contracts of employment including gratuitous companies (in those circumstances by which the agent is prepared to render a pleasant favour).
It not only adopts the overall principle of freedom of kind”—with the uncommon exception that a particular type is required in these instances where a statutory article expressly prescribes it—but even states that the granting of authority needn’t be within the form prescribed for the judicial act to which the company power relates.
Thus, such an agent has been held personally liable by German courts for mistakes made in the middle of contract negotiations (culpa in contrahendo). Extra particularly, the agent should act solely for the pursuits of his principal and due to this fact should account for any monetary benefit (secret profit”) he may derive from a transaction.