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Mandate Notes

In: Business and Management

Submitted By daviiiiiid
Words 1699
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MANDATE
Mandate =Representation;
Many types of mandate; lawyer; corporate directors;
Mandate=Agency
Mandator=principal
Mandatary=Agent
2130 C.C.Q. Definition
Mandator: Grants powers to represent him;
Mandatary:
Receives power to represent;
Must accept the powers and then must exercise the functions or duties
Power of attorney:
Refers to the document or the power itself

2131 C.C.Q. May have different objectives
Accomplishment of an act: i.e. sign a document or transaction on behalf of mandator;
Administer all or part of the patrimony of mandator: i.e. administer a building or business or even all his assets while away;
Assure physical or moral well being in the event of incapacity; administer patrimony in the event of incapacity

2132 C.C.Q.:Acceptance:
Express (in writing)
Tacit: presumed from:
Acts accomplished;
Even silence (i.e. reception of assets to care for and doing nothing)

2133 C.C.Q.

Gratuitous: for free
No payment
This is presumed between natural persons
Onerous: for a fee
Presumed for a professional mandate
I.e. lawyer, trust company

2134 C.C.Q.

The contract may state remuneration. Failing which, by usage or law (Court may set)

2135 C.C.Q.
Special mandate:
For A particular or specific act
General mandate:
All the mandator’s patrimony
This confers only powers of simple administration unless express powers are specified. i.e. sell property
Incapacity:
confers powers of full administration

2136 C.C.Q.
Mandate includes all powers necessary to fulfill duties.
Powers are inferred by the nature of the mandate even if not expressly mentioned
All acts incidental to powers granted and necessary for performance
Ex.: Administration of building: Major repairs which occur may require getting a loan to pay for them

2137 C.C.Q.
Professionals
In their case, all powers which are ordinary part of that profession need not be expressly mentioned – included ;
I.e. lawyer, accountant
Need not be specified;

2138 C.C.Q. MANDATARY’S OBLIGATIONS
Fiduciary Duty; Duty of Trust;
“Bon père de famille”;
Fulfill mandate; Act as quickly as possible;
Obligation of means/result;
Act prudently and diligently (take no unnecessary risks – like stock market;
Honestly and faithfully: best interests of mandator;
Avoid conflict of interest (even potential)
2139 C.C.Q. – KEEP MANDATOR INFORMED
At his request;
Periodically according to circumstances;
At fulfillment of mandate
I.e. building is sold or lawyer has settled case
2140 C.C.Q.
Mandatary must perform mandate personally unless specifically authorized;
Unforseen circumstances:
Mandatary may appoint substitute if he can’t fulfill mandate and can’t inform mandator in time

2141 C.C.Q.
Accountable to mandator for acts of those he appoints without authorization;
If authorized, accountable for errors he made in selection or instructions given to substitute (i.e. chose someone un-qualified)

2142 C.C.Q.
Mandatary may delegate some powers unless prohibited by mandate

Mandatary is liable

2143 C.C.Q.
Mandatary may represent conflicting interests in the same act if:
He informs each
Usage allows (notary – sale)
Mandataries are aware
He must act impartially
Mandator may request nullity if he suffers damages and was unaware

2144 C.C.Q.
Several mandataries appointed together;
All must accept
Must act jointly unless otherwise stipulated
Solidarily responsible for errors
2145 C.C.Q.
If one of several mandataries acts alone, he exceeds his powers, invalid; unless this is favorable to the mandator

2146 C.C.Q. Duties
Mandatary may not use any information or property resulting from his mandate;
Without mandator’s consent;
Failure:
Compensate mandator for loss;
Remit any benefit to mandator;
Pay appropriate rent or interest
Ex:Can Aero;Peso Silver mines;
Who owns business opportunity?;
BMO vs.Ng;
2147 C.C.Q.
Cannot become a party to transaction mandatory is performing for mandator; without consent (tacit – aware);
Relative nullity – only mandator may cancel;
Real estate agent, attorneys;

2148 C.C.Q.
Gratuitous mandate:
Court may reduce mandatary’s liability (damages) if unfair and good faith;
So as to not discourage from acting;
Insurance;

OBLIGATIONS OF MANDATOR
2149 C.C.Q.: Cooperate with mandatary;
2150 C.C.Q.:
Advance necessary money to perform;
Reimburse expenses;
Pay remuneration
2151 C.C.Q.: Pay interest on expenses from day incurred;

2152 C.C.Q.
Mandator must:
Discharge mandatary from obligations toward third parties if mandatary acted within mandate
Not liable if mandatary has exceeded mandate unless mandator ratifies acts;
If mandate expires or is withdrawn – mandator not liable unless ratifies or mandatory is unaware of expiration

2153 C.C.Q.

Acts exceeding mandate are presumed ratified if they are more advantageous than mandator expected

2154 C.C.Q.

When mandatary commits no fault, mandator must compensate him for any damages suffered
2155 C.C.Q.

If no fault – sums owed to mandatary must be paid even if mandate was not successfully completed
Lawyer gets paid if he loses;

2156 C.C.Q.

Several mandators:
Solidarily liable toward mandatary
OBLIGATIONS OF MANDATARY TOWARD THIRD PERSONS
2157 C.C.Q.
Not personally liable to third persons if he stays within limits of his mandate;
Therefore the contract binds the mandator to third parties;
But mandatary must not act in his own name or he is liable. Mandator may also be liable in such a case
2158 C.C.Q.: If he exceeds powers: personally liable to third persons unless:
Third person aware of mandate
Mandator ratifies act

2159 C.C.Q. - Identity of mandator
Mandatary must disclose to third person if he has agreed to do so to the third parties
Must not disclose if he was ordered to conceal by mandator
Must disclose if mandator is insolvent or a minor or person under protective supervision
Personal liability of mandatary:

2160 C.C.Q
Liable for all acts of mandatary performed within limits of mandate unless there is agreement to the contrary;
Acts which exceed mandate: also liable if ratified

2175 C.C.Q. TERMINATION OF MANDATE
Revocation by mandator
Renunciation by mandatary;
Extinction of power conferred;
Death of a party;
Bankruptcy or protective supervision also end the mandate

2184 C.C.Q.
Upon termination mandatary must:
Render account
Return all property received
Even if not due to mandator
Pay interest on any balance owed to mandator from date he is in default

2185 C.C.Q.
Mandatary may deduct what he is owed:
Remuneration;
Expenses
Mandatary may retain any property until he is paid

Definition of a “business”: art. 1525 C.C.Q.
“The carrying on by one or more persons of an organized economic activity, whether or not it is commercial in nature consisting of producing, administering or alienating property or providing a service, constitutes the carrying on of an enterprise.”
Objet: Earning a profit  organized continuing activity: selling your house is not a business
ART. 298: LEGAL PERSONS or CORPORATIONS
Possess juridical personality – exist
Public purpose or private purpose
We will discuss primarily private corporations

ART. 299 C.C.Q.
Constituted in various forms in either federal or provincial law;
Date of certificate of incorporation= birth
Non-profit or For profit
Publicly traded (A.M.F./S.E.C.) or Private corporation

ART. 300 C.C.Q.
Public corporations are established by special laws like Hydro-Québec, Canada Post;
Private corporations are established by general laws applying all companies of their kind;
Civil code applies to all and governs relations with other persons and their property, i.e. contracts;
EFFECT OF “JURIDICAL PERSONALITY”
ART. 301 C.C.Q.: Can exercise civil rights;

ART. 302 C.C.Q.: Have a Patrimony, property;
Corporation may divide or appropriate its patrimony to a purpose;

Extra-patrimonial rights/obligations which flow from its nature;
ART. 305 C.C.Q. – NAME
Name/number which certificate of incorporation grants them: i.e. 1783453 Canada Inc.
Uses this name to exercise civil rights/i.e. contracts;
Name must conform to law:
ART. 309 C.C.Q. – DISTINCT PERSONALITY
CORPORATE VEIL
The corporation is distinct from its members;
Shareholders, directors
Their acts are not binding on members but only on the legal person
Except – exceptions in laws
(GST, PST etc.)
Fraud
MANAGING A LEGAL PERSON
ART. 311 C.C.Q.:
Broad management by the board of directors:
Mandataries/representatives;
General meetings of shareholders:
Elect directors;
Make certain decisions;
MANAGING A LEGAL PERSON
ART. 312 C.C.Q.: daily management: Senior officers;
Mandataries/representatives;
Employees;
President, V.P., C.E.O., C.F.O., Etc.;
Actions are binding on corporation;
To extent of powers granted by constituting act/by-laws;
INTERNAL FRAUD
ART. 316 C.C.Q.: embezzlement;
Directors, senior officers, founders, participating shareholders; liable for damages suffered by the corporation;
Non-participating members liable if they profited;
Any interested person may apply for this remedy;
Shareholder, trustee, creditor
EXTERNAL FRAUD
ART. 317 : CORPORATE VEIL
Corporation cannot use distinct personality fraudulently against a person in good faith;
To dissemble (mask) a fraud, abuse of rights or contravention of rules of public order;
Directors or shareholders may be personally liable;
The Court “pierces the corporate veil”;
ART. 319 C.C.Q.
Corporation may ratify acts of another person prior to incorporation (i.e. contracts);
ART. 320 C.C.Q.: Person “acting on behalf of a corporation to be constituted”;
Must be stipulated in the contract;
Failing such a stipulation, person is personally liable;
The corporation may not assume the obligations;
Personally liable
ART. 321 C.C.Q.
Directors are mandataries of corporation;
Bind the corporation unless they exceed powers;
Exception: employees: 1463 CCQ;
ART. 322 C.C.Q. – OBLIGATION OF PRUDENCE /DILIGENCE
Honesty, loyalty and best interests of corporation;
Mandatary is administering the property and engaging the responsibility of the legal person.
Has no right to put this in jeopardy
ART. 323 C.C.Q.
Directors cannot mingle company property with their own; bank accounts, checks;
Cannot use corporation property for his profit or profit of third persons;
Cannot use any information obtained in exercise of his duties without authorization;
ART. 324 C.C.Q.
Must avoid conflict between personal interests and duties as director;
Must declare all potential conflicts of interest;
i.e. other corporations or institutions he may have invested in)
Including the value of such interest;
Must be recorded in minutes of board of directors;…...

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