Concept and Fundamentals of Active Representation
Die active representation is a fundamental legal concept in German civil law that governs the legal representation of a person by a representative when making declarations of intent. While passive representation covers the receipt of declarations of intent on behalf of the represented party, active representation relates to the independent delivery of declarations of intent in another’s name. The rules on active representation are mainly set out in Sections 164 et seq. of the German Civil Code (BGB).
Key Characteristics of Active Representation
In active representation, the representative makes a declaration of intent that has a direct legal effect for and against the person represented. For this, the law requires that the representative acts within a valid power of representation and makes the declaration “in the name of the represented party.”
Requirements for Active Representation
- Making an Independent Declaration of Intent
– The representative must independently make a declaration of intent and possess the willingness required for the transaction.
- Acting in the Name of the Principal (Principle of Transparency)
– By disclosing the representative status, it must be clear to third parties that the representative is conducting the transaction not for themselves but for the principal.
- Power of Representation
– The power of representation results from law, legal transaction (authorization), or court appointment. If the authority is lacking, this is referred to as “representation without power of representation,” the legal consequences of which are regulated separately.
- Legal Consequences of the Declaration
– The legal consequences take effect directly for the principal, not for the representative.
Distinction from Passive Representation and Messenger Role
The distinction from passive representation refers to whether the representative delivers (active) or receives (passive) a declaration of intent. In contrast, in the so-called messenger role, the messenger does not make their own declaration of intent, but merely delivers that of another.
Legal Sources and Statutory Provisions
The relevant provisions on active representation are found mainly in Sections 164 to 172 BGB. Additional provisions, such as those in the German Commercial Code (HGB), regulate commercial agency and special forms of representation.
Sections 164 et seq. BGB
- Section 164 BGB (Effect of the Representative’s Declaration)
– Regulates that declarations of intent made by the representative within the scope of authority take direct effect for and against the principal.
- Section 166 BGB (Intention to Represent and Legal Capacity of the Representative)
– Generally, the legal capacity and knowledge of the representative, not the principal, are decisive.
- Section 177 BGB (Representation without Authority)
– Contracts concluded without authority are initially pending and require approval by the principal.
Forms of Power of Representation in Active Representation
The power of representation can arise from different sources:
Legal authority to represent
Typical cases of legal power of representation are parental custody (Sections 1626, 1629 BGB) and guardianship (Section 1902 BGB). In such cases, the right of representation arises directly from the law.
Power of Representation by Legal Transaction (Authorization)
The most common form arises from the legal transaction between principal and representative. The authorization can be given expressly or impliedly. Its scope is governed by the extent of authority granted (Sections 167 et seq. BGB).
Statutory Power of Representation in Organizations
For legal entities and partnerships, the power of representation regularly arises from law and by-laws (for example, managing directors of a GmbH or board members of an AG).
Areas of Application of Active Representation
Legal Transactions in Civil Law
Active representation plays a central role in everyday business life, such as in sales, lease, or service contracts. Both private individuals and businesses regularly use active representation to have authorized agents carry out legal transactions.
Company Law
In company law, active representation is essential for representing partnerships (OHG, KG) and corporations (GmbH, AG). Here, managing directors, board members, or authorized officers frequently act as representatives.
Commercial Law
In commercial transactions, the HGB regulates numerous special forms of active representation, such as commercial power of attorney (Sections 48 et seq. HGB) and agency authority (Sections 54 et seq. HGB). These special representation powers are tailored to the needs of commerce.
Legal Consequences, Liability and Limitations of Active Representation
Direct Attribution of Legal Consequences
If a declaration of intent is validly made in the name of the principal and within the authority of representation, the legal consequences directly bind the principal. The representative is generally neither entitled nor obliged, unless this has been expressly agreed.
Exceeding or Lacking Authority of Representation
If the representative acts without or beyond authority, the transaction is provisionally ineffective under Section 177 BGB. It requires approval by the principal. Until approval, the other contracting party is bound by its declaration. If the principal refuses approval, the contract is definitively void. In certain cases, the representative may be liable for damages to the business partner pursuant to Section 179 BGB.
Limits and Abuse of Representation
The power to represent is limited by the scope of the authority granted. If the representative abuses their authority (especially in the internal relationship), the transaction will generally remain binding for and against the principal, unless the business partner is or should be aware of the abuse.
Relationship to Other Legal Concepts
Distinction from a Direct Transaction
In a direct transaction, the acting party acts in their own name, and the legal consequences directly affect them. The distinction between an active representative and acting on one’s own behalf is therefore clear.
Representation in International Legal Transactions
Internationally, different rules and requirements apply with respect to active representation. In the context of German law and other legal systems, for example, conflict of law rules or special foreign representation provisions may play a role.
Importance of Active Representation in Legal Transactions
Active representation enables flexible and efficient legal transactions. It is a key precondition for the functioning of modern economic life and at the same time creates legal certainty for contracting parties.
Summary
Die active representation is a fundamental legal concept of German law. It allows a person (representative) to independently make declarations of intent in the name of another (principal), so that legal effects apply solely to the principal. Statutory provisions, especially Sections 164 et seq. BGB, regulate the requirements, forms, and legal effects of active representation. Its scope extends across all areas of civil, company, and commercial law. For valid active representation, it is essential to make an independent declaration of intent, disclose the representation in a timely manner, and have valid authority. These rules safeguard legal transactions and ensure the orderly attribution of actions conducted in another’s name.
Frequently Asked Questions
What requirements must be met for valid active representation?
For legally effective active representation, the representative must first hold valid authority. This may arise from legal grounds (e.g., parents for minor children) or a legal transaction (granting of power of attorney). The representative must act in the name of the principal when carrying out the transaction (principle of transparency, Section 164 (1) Sentence 1 BGB), so that the intent to represent is clearly visible to outsiders. There is no acting on behalf of another if the representative expressly or impliedly acts in their own name (direct transaction). The representative must also have at least limited legal capacity to validly carry out a transaction; representation is excluded for highly personal transactions, such as marriage (§ 1311 Sentence 1 BGB). A possible lack of authority can render the transaction ineffective unless the principal subsequently approves the transaction (§ 177 BGB).
Can a representative represent multiple principals actively at the same time?
As a rule, it is legally permissible for a representative to actively represent several persons at the same time in declarations of intent. However, such multiple representation is subject to certain restrictions. Problems arise in particular when conflicts of interest may occur, for example, when a contract is concluded between parties represented by the same representative (self-dealing). Such self-dealing is generally prohibited under Section 181 BGB unless it is permitted by legal transaction or consists solely of the fulfillment of an obligation. In particular, special rules and exceptions, such as those applying to authorized officers, must be observed in commercial law (§ 181 BGB in conjunction with § 54 HGB). In cases of conflicts of interest, it must also be checked whether the declaration of intent can be attributed to the principal at all or is provisionally ineffective due to lack of authority.
What are the effects of a defective declaration of intent by a representative?
A defective declaration of intent made by a representative—for example, due to mistake, deception, or duress—takes effect directly for and against the principal, provided the other requirements for valid representation are met. The principal may contest such a declaration of intent (Section 166 (1) BGB), but it is the defects in the representative’s intent—and not the principal’s—that matter. For instance, if the representative was mistaken or deceived at the time of making the declaration, the principal can contest that declaration. If, however, the representative knows of a defect in intent of which the principal was unaware, the representative’s knowledge still applies. Exceptions apply in the case of specific instructions from the principal (Section 166 (2) BGB). For example, if the principal acted with fraudulent intent, the principal’s state of knowledge is decisive.
What is the difference between active and passive representation from a legal point of view?
In legal terms, active representation refers to the making of one’s own declarations of intent by the representative in the name of the principal (e.g., the conclusion of a contract by the representative), whereas in passive representation, the representative is authorized to receive declarations of intent on behalf of the principal. In active representation, the legal effect—such as the conclusion of a contract—takes direct effect for and against the principal, whereas for passive representation, the key point is that the declaration is deemed received by the principal when delivered to the representative (Section 164 (3) BGB). In both cases, a corresponding authority must exist.
Are there any form requirements for declarations made within the framework of active representation?
Whether special form requirements must be observed for declarations of intent made through active representation generally depends on the underlying transaction. For example, if notarial certification is required for the underlying transaction—as in the case of real estate purchase contracts (Section 311b (1) BGB)—the representative’s declaration must also be made in the proper form (Section 164 (2) BGB). Similarly, any power of attorney may be subject to specific form requirements if the underlying transaction is subject to a form (e.g., Section 167 (2) BGB: notarization required for a power of attorney in real estate purchases). If the form is not observed, the transaction carried out by the representative is invalid.
Can an active representative also grant sub-authority (sub-power of attorney)?
An active representative can in principle also grant a sub-power of attorney, provided that the original power of attorney allows this or there are no statutory or contractual restrictions. According to Section 168 Sentence 2 BGB, the power of attorney may be revocable or irrevocable, which also affects the possibility of sub-authorization. If the principal prohibits the representative from granting sub-authorization, such appointment is not permitted. The sub-power of attorney depends for its validity on the main power of attorney (accessoriness doctrine), and its expiration usually leads to the expiration of the sub-power of attorney (Section 168 Sentence 1 BGB). The legitimacy and effect of active representation actions by sub-representatives are governed by the same principles as for the main representation.
