Mandate - Defined
Contract between a principal and a mandatary conferring on the mandatary the authority to transact on the principal’s behalf
Requirements
General Rule = No form requirements
- Exception = Equal Dignities Doctrine— if act to be performed by mandatary requires a certain form, then the act creating the mandatary requires that certain form
- Ex: Mandate to buy immovable property must be in writing
Mandatary’s Authority
General Rule = Principal may confer general authority upon mandatary
Exception = Certain act require express authority given to mandatary
- Acquiring, alienating, encumbering, or leasing property
- Making a donation inter vivos donations
- Accepting or renouncing a succession
- Contracting a loan or acknowledging or remitting a debt
- Becoming a surety
- Making or endorsing a promissory note or negotiable instrument
- Entering into a Compromise or agreeing to Arbitration
- Making health care decisions
Duties of Mandatary
Act with prudence and diligence in fulfilling the mandate
Mandatary who exceeds his authority vested to him by the principal is liable to principal for any loss principal has sustained
- Exception = Unless principal ratifies the unauthorized acts
Mandatary does not exceed his authority when the result of the act is more advantageous to the principal than what was authorized
Duties of Principal
Principal is bound to the mandatary to perform obligations that:
- Mandatary contracted within the limits of his authority and
- Mandatary contracted after the mandate terminated if mandatary did not know of termination
Principal is not bound to the mandatary to perform obligations that the mandatary contracted which exceed the limits of mandatary’s authority
- Exception = Unless principal ratified unauthorized acts
Mandatary to 3P
If mandatary acted within his authority but:
Disclosed mandate AND the principal = only principal is bound to the 3rd party
- Mandatary is not bound to the 3rd party
Disclosed mandate BUT NOT the principal = Mandatary is personally bound to 3rd party until identity of principal is disclosed to 3rd party
Disclosed NEITHER the mandate NOR the principal = Mandatary is personally liable to the 3rd party
If mandatary exceeded his authority, he is personally bound to the 3rd party
- Exceptions:
- 3rd party knew mandatary was exceeding his authority; OR
- Principal ratifies the contract
Principal to 3P
General Rule = Principal is bound to 3rd party for all contracts made by mandatary within the limits of his authority
- Exception = Apparent Authority—Principal causes 3rd party to believe that the person is his mandatary, then principal is bound to the 3rd party even if the act was not authorized (b/c there is no mandate here)
3P to Principal
3rd party is bound to the principal in all cases
- Exception: Not bound if:
- Mandatary did not disclose mandate nor the principal; and
- Obligation is strictly personal
Termination of Mandate
Terminates upon:
- Death of either mandatary or principal
- Interdiction of mandatary
- Notice of termination by mandatary or principal
Termiantion of Mandate - Exceptions
Even if one of those 3 methods is triggered, mandate will not terminate if:
- 3rd Party lacks knowledge of the termination
- Principal bound by mandatary mandatory contracts until 3rd party is notified
- Principal dies and mandatory’s failure to act would injure principals interests
- If mandate was recorded, revocation of it must be recorded as well to effect 3rd parties
- Mandatary is unaware of termination and acts in GF
- Acts mandatary made in Good Faith will be binding on the principal
Management of Affairs
When a person (the manager) acts without authority to protect the interests of another (the owner) in the reasonable belief that the owner would approve of the action if made aware of the circumstances
- Manager must promptly give notice to the owner and await directions
- Manager must act as a Prudent Administrator
- Manager liable for any loss from failure to act within duty
- Owner must reimburse manager for all necessary and useful expenses
