Unauthorised Agency in Dutch Law

Abstract

Under Dutch law, unauthorised agency arises when a person (the ‘agent’) concludes a contract with a third party in the name of someone else (the ‘principal’) without (sufficient) authority. The general effect is that neither the principal nor the third party is bound or entitled under a contract so concluded. This rule is not applied in cases where the third party successfully invokes the doctrine of apparent authority or where the principal subsequently ratifies the unauthorised act. Furthermore, in the case of unauthorised agency the third party may hold the unauthorised agent (the falsus procurator) liable for the damage which he has suffered as a consequence of the agent’s lack of authority. In this chapter, in II, I first examine the distinction between direct and indirect agency. In III I devote some attention to the nature and general effect of unauthorised agency. Afterwards, I then turn to the main exceptions to the general effect of unauthorised agency: apparent authority (IV) and ratification (V). VI follows with some comments on the liability of the falsus procurator and VII with a treatment of the interrelationship between apparent authority, ratification and the liability of the falsus procurator. VIII and IX each elaborate on a special case which can be associated with unauthorised agency, namely acting in the name of a principal yet to be named and acting in the name of a company yet to be incorporated. X ends this chapter with some concluding observations.