- •II. Agency
- •1. Direct representation: introduction
- •2. No general concept of agency in Roman law
- •3. Acting for (and through) others in Roman law
- •50 The Law of Obligations
- •52 The Law of Obligations
- •54 The Law of Obligations
- •4. The erosion of the rule against agency
- •56 The Law of Obligations
- •5. The evolution of the modern concept of agency
- •§ 788 Sachsisches Gesetzbuch; artt. 1984, 1998 code civil.
- •58 The Law of Obligations
II. Agency
1. Direct representation: introduction
Not only the contract in favour of a third party but also the modern law
of agency have been developed, in the civil-law systems, largely in
opposition to the situation in Roman law. Again, it was the "alten
stipulari nemo potest" principle which stood in the way; again,
however, matters were complicated by the fact that the Corpus Juris
Civilis did not really present a very clear and consistent picture. Again,
it was Hugo Grotius who had a major impact on the development; m
particular, he advanced the legal analysis by distinguishing for the first
time between contracts in favour of a third party and agency: "Solent
Cf. in this context the polemic though instructive remarks by von Kirchmann. Die
Werthlosiqkeit der Jurisprudenz als Wissenschaft (1848), as quoted by Zwcigcrt/Kutz/Weir.
p. 126. m Cf. e.g. Mutual Life Insurance Co. of New York v. Hotz 1911 AD 556 sqq.; McCullogh v.
Fernwood Estate Ltd. 1920 AD 204 sqq. and the criticism by Dc Wet, op. cit., note 43,
pp. 146 sqq.; Dc Wet en Yeats, pp. 94 sqq. For a different view, see J. Kerr Wylie,
"Contracts in favour of third parties", (1943) 7 THRHR 94 sqq. 81 Cf. the comparative analysis by Zweigert/Kotz/Weir. pp. 124 sqq. H~ Cf. the comparative analysis by Zweigert/Kotz/Weir, pp. 133 sqq.; and the historical
analysis by Palmer, (1989) 33 American Journal of Legal History 3 sqq. юЪип!ор Pneumatic Tyre Co. Ltd. v. Selfridge and Co. Ltd. [1915] AC 847 (HL) at 853;
cf. also Beswick v. Beswick [1967] 2 All ER 1197 (HL); Treitel, Contract, pp. 458 sqq. 84 Cf. Buckland/McNair, pp. 214 sqq.; Arthur L. Corbin. Contracts for the Benefit of Third
Persons, (1930) 46 LQR 12 sqq.; Louise Wilson, "Contract and Benefits for Third Parties",
(1987) 11 Sydney LR 230 sqq.
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46 The Law of Obligations
et controversiae incidere de acceptatione pro altero facta: in quibus
distinguendum est inter promissionem mihi factam de re danda alteri,
et inter promissionem in ipsius nomen collatam cui res danda est.""5
This distinction is based on Grotius' general emphasis on the will of the
contracting parties, and it has remained fundamental ever since.86 It was
developed as a consequence of the rejection of the "alteri stipulari nemo
potest" principle. As long as this principle was applied, it was seen to
refer to all situations in which an independent third party acquired a
right under a contract which had been concluded between two other
parties. This is exactly what (genuine) contracts in favour of third
parties and agency have in common, and therefore it had hardly been
necessary thus far to differentiate cases which were prohibited anyway.
Agency, as we see it today, refers to a situation where one person (the
agent), authorized by a third party (the principal), concludes a
transaction on behalf of the latter with another person, with the result
that such transaction will take effect between the principal and this other
person.87 Thus, the main difference from what we call a contract in
favour of a third party lies in the fact that in the one case the principal
in every respect becomes party to the contract that has been concluded
by the agent; the agent is merely acting as a conduit pipe and has no
concern with the effects of the transaction. In the other case, the third
party acquires only the right to claim performance. He does not
become a party to the contract which is concluded, and becomes
effective, between promisor and promisee. Thus, the imposition of a
duty to perform is conceivable only in the case of agency; a contract not
only for the benefit of, but casting a burden on a third party is not, and
has never been, admissible.88 If one looks at the will of the parties
concerned, one can say that the agent wants to accept the promise in the
name of the principal, whereas the promisee under a contract in favour
of a third party wants to act in his own name for the benefit of the third
party. For agency, the continental legal systems specify a further
requirement: the agent has to act in the name of the principal,ay and
85 De jure belli ac pads. Lib. II, Cap. XI, 18. 1 The distinction is sometimes blurred; cf., tor example, supra, notes 48, 69. ' Thus, one
person acts, but the effects of that act arise in a third party. Rabel, "Die Stellvertretung
in den hellenistischen Rechten und in Rom", in: Atti del congresso internazionale di
diritto romano, vol. I (1934), p. 238, has called this a legal miracle ("Ursprunglich
%ibt es nirgends eine direkte Stellvertretung. Sie ist ein juristisches Wunder"). HH Cf. Raul/D. 45, l', 83 pr.; Windscheid/Kipp, § 317; Klaus-Peter Martens, "Rechtsgeschaft
und Drittinteressen", (1977) 177 Archiv jur die civilistische Praxis 139 sqq. The
validity of such a transaction is (in modern times) incompatible with the autonomy of each
individual to enter into legal transactions (Privatautonomie). In the case of agency, this
problem docs not arise, as the principal has conferred the power of agency on the agent. 89 Cf., for example, Windscheid/Kipp, § 73, n. 15; Wolfram Muuer-Freienfels, Die
Vertretung beim Rechtsgeschaft (1955), pp. 15 sqq.; Karsten Schmidt, "Offene Stellvertretung"
1987Juristische Schulung 425 sqq.; cf. also art. 1984 code civil; art. 1388 codice civile. For a
comparative evaluation, see Philippos Doris, "Die unmittelbare Stellvertretung des BGB im
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Stipulatio alteri, Agency and Cession 47
must therefore make it clear to the other party that he is not acting in
his own name.90 This is the publicity principle'" which, incidentally,
had also already been enunciated by Grotius and the other natural
lawyers.92 In contradistinction, English law recognizes the "undisclosed
principal":91 as long as the agent has authority to act at the time
when the contract is made, the principal acquires rights and duties
under this contract even if the agent did not reveal the fact that he was
acting on behalf of another. Although this has often been regarded as a
strange anomaly of English law,94 the undisclosed principal has
managed to creep into one civil-law system, namely the usus hodiernus
of Roman-Dutch law.95 According to the South African Appellate
Division, the opportunity to expel the uncouth intruder has unfortunately
been lost.96