Concept and Legal Classification of Managing Another’s Affairs
Die Managing Another’s Affairs is an important legal concept that plays a central role, particularly in civil and criminal law. In German law, managing another’s affairs refers to the performance of an act by a person (the so-called manager) in the interest or on behalf of another person, without this action being based on their own matters or obligations. The term is relevant in various areas of law, including in connection with management without mandate (GoA), criminal law, and the professional legal regulations for attorneys.
Fundamentals of Managing Another’s Affairs
Definition and Requirements
Managing another’s affairs refers to any act that objectively falls within the sphere of interest or legal sphere of another and is therefore to be regarded as their business. This includes both factual and legal acts. The distinction from one’s own business is crucial: A business is considered ‘foreign’ if it is carried out externally in the interest or on behalf of another person or primarily concerns their obligations.
Types of Management of Another’s Affairs
Managing another’s affairs can relate to legal transactions (e.g., concluding a contract on behalf of a third party) or to real acts (e.g., repairing the property of a third party).
Genuine and Non-Genuine Management of Another’s Affairs
- Genuine Management of Another’s Affairs: The transaction exclusively concerns the legal sphere of another.
- Non-Genuine Management of Another’s Affairs: An act that also affects one’s own interests but is predominantly foreign.
- Also-Foreign Business: A transaction is simultaneously one’s own and another’s business.
Relevance of Managing Another’s Affairs in Civil Law
Management without Mandate (§§ 677 et seq. BGB)
Management without mandate (GoA) is the classic case of managing another’s affairs under the German Civil Code (BGB). According to § 677 BGB, a person who manages a business for another without being authorized or otherwise entitled towards them is obliged to conduct the business as the interests and the actual or presumed will of the principal require.
Requirements of the GoA
- Foreignness of the Business: The act must objectively be for another.
- Management without Mandate: There must be no mandate or other authorization.
- Intention to Manage Another’s Business: The act must be performed with the awareness and intent to act for another.
Legal Consequences
- Duties of the Manager: Diligent conduct of the business, accounting, surrender of acquired benefits.
- Claims of the Manager: Reimbursement of expenses under § 683, 684 BGB and, if applicable, remuneration.
- Obligations of the Principal: Acceptance of proper management, reimbursement of expenses, liability for damages.
Tort Law Classification
Managing another’s affairs can also play a role in tort law. For instance, unauthorized action concerning another’s matters can constitute a tortious act (for example, interference with an established and practiced business enterprise, § 823 para. 1 BGB).
Significance in Criminal Law
In criminal law, managing another’s affairs can be particularly relevant in offenses where actions are taken for a third party—such as in fraud (§ 263 StGB), unauthorized representation (by analogy to § 179 BGB), or breach of trust (§ 266 StGB). The focus here is on the objective and subjective foreignness of the activity and on whether the act is performed in the interest or on behalf of another.
Special Legal Aspects
Management of Another’s Affairs in Employment Law
In employment law, managing another’s affairs may mean that an employee acts on behalf of the employer without instruction or outside of their employment relationship. The civil law rules on management without mandate then apply subsidiarily.
Significance in Corporate Law
In corporate law, managing another’s affairs becomes relevant, for example, when a shareholder acts for the company without appropriate authorization, leading to claims for or against the company.
Distinctions and Elements of the Offense
Distinction from Own Business
Not every transaction that also concerns the interests of another is automatically considered a foreign business. A precise examination is necessary to determine whether the act is primarily attributable to one’s own legal sphere or is predominantly foreign in nature.
Intention to Manage Another’s Business
The subjective intention to act in the name and interest of a third party is a central element in the management of another’s affairs. If this is lacking, the transaction is either an own business or another form of participation in another’s business.
Legal Consequences and Practical Relevance
Managing another’s affairs can entail extensive legal consequences, including liability issues, claims for reimbursement, and obligations from tort as well as unjust enrichment claims. It can also be of great importance for relationships of trust and powers of representation in business life.
Literature References and Further Sources
- German Civil Code (BGB), in particular §§ 677 et seq.
- Criminal Code (StGB), relevant criminal offenses
- Current commentary literature and case law on GoA and distinctions in the management of another’s affairs
Summary
Die Managing Another’s Affairs is a complex legal term that covers a wide range of applications in civil and criminal law. It describes the independent undertaking of a business by a person in the foreign interest or name, without a direct legal relationship existing. The exact requirements, distinctions, and legal consequences must always be carefully examined, as extensive obligations and claims for both parties may depend on these.
Frequently Asked Questions
When does the management of another’s affairs according to German civil law occur?
In a legal context, the management of another’s affairs occurs when a person (manager) intentionally carries out a business—that is, a factual or legal act—that at least also falls within the interest and legal sphere of another (principal). This can occur with a mandate (i.e., according to the instructions and with the knowledge of the principal) or without a mandate, that is, on one’s own initiative and possibly even without or against the will of the principal. In German civil law, §§ 677 et seq. BGB (management without mandate, GoA) are particularly relevant. The concrete determination of whether a transaction is a foreign business depends crucially on whether the act is objectively at least also in the interest and spirit of the principal. Typical cases are, for example, rescuing another’s dog from a dangerous situation or settling another’s bill in their name.
What legal obligations arise from managing another’s affairs without a mandate?
If a foreign business is undertaken without a mandate, the manager assumes various obligations analogous to the rules of a mandate relationship (§§ 677, 681 BGB). The manager must execute the transaction in the interest and presumed will of the principal in such a way that best serves their welfare. Furthermore, the manager is obligated to hand over what was gained from the management (§ 681 BGB), and must provide comprehensive accounts regarding the management and any expenses (§ 666 BGB analogously). There is also an obligation to compensate for damages arising from improper or duty-violating management (liability under § 280 BGB in conjunction with § 677 BGB).
Can the manager claim reimbursement of expenses?
Basically, in a justified management without mandate under § 683 sentence 1, 670 BGB, the manager has the right to demand reimbursement from the principal for necessary and useful expenses. The decisive criterion is that the transaction corresponds to the actual or presumed will of the principal. If the manager acted against the will of the principal and the transaction was not objectively necessary, there is no entitlement to reimbursement of expenses.
What are the differences between justified and unjustified management without mandate?
Justified management without mandate (§§ 683, 677 BGB) occurs when the managed business is also in the actual or presumed will of the principal. In this case, the manager is entitled, under certain conditions, to claims for reimbursement of expenses as well as, where appropriate, damages. In unjustified GoA (§ 684 BGB)—that is, a management against the will of the principal or without their interest—there is generally no claim for reimbursement of expenses; the manager must only hand over what was obtained according to the law of unjust enrichment and may be liable for damages caused.
How does it compare to agency and commission?
Managing another’s affairs without a mandate is legally fundamentally different from agency (§§ 164 et seq. BGB) and mandate (§§ 662 et seq. BGB). Unlike a mandate, GoA lacks an explicit contractual agreement. Compared to agency, a manager usually does not act in the name of the principal—their declarations do not directly apply for or against the principal, except in cases of emergency representation. The GoA rather serves to close gaps in legal protection when a foreign business is conducted without a contractual obligation.
What is the significance of the “foreign intent to manage” in the context of GoA?
The so-called ‘foreign intent to manage’ is a central distinguishing criterion in the context of management without mandate. The manager must act with awareness and intent to conduct a foreign business (intent to manage another’s affairs). If this intent is missing and the person acts solely in their own or a joint interest (own or neutral business), the provisions of GoA—and hence the associated rights and obligations—generally do not apply. An exception exists for so-called ‘also-foreign’ businesses, in which actions benefit both oneself and another; GoA may apply here if the foreign intent to manage was present.
In which cases is management without mandate excluded?
The application of the rules on management without mandate is excluded if a statutory special regulation applies that conclusively governs the relationship in question (e.g., custody, management under family law). Also, if the principal’s explicit contrary will exists—unless this is exceptionally irrelevant (e.g., rescue from an emergency)—or if the act is purely one’s own business, GoA does not apply. Recourse to GoA is also excluded if a contractual relationship (e.g., mandate) already exists or a legal provision provides for more specific regulations.
