Mandate, Third Persons, and Apparent Authority

Overview

A representative's signature raises several distinct questions: who became a party, whether the representative had authority, whether the apparent mandator later adopted the transaction, and whether anyone committed a personal fault. The answer cannot be found solely in a job title or in the fact that someone else ultimately benefited from the transaction. Quebec law distributes contractual effects and civil responsibility through specific rules of mandate (mandat).

The mandator (mandant), mandatary (mandataire), and third person (tiers) occupy different positions. The third person is outside the contract conferring authority but may become the mandator's cocontractant through its performance. Art. 2157 CCQ addresses the mandatary's personal commitment; art. 2160 CCQ addresses the mandator's commitment. The provisions should be read together without turning representative status into a general immunity from liability.

Start with the actual authority described in formation, powers, and duties. This lesson then examines disclosure, unauthorized acts, ratification, apparent mandate, personal fault, and expired powers. The rules concern ordinary mandate. Particular public bodies and regulated activities can require a different analysis of authority and cannot be treated as ordinary private transactions simply because someone uses the word representative.

Learning Objectives

• Determine which person is contractually bound by a disclosed, undisclosed, or partially disclosed mandate.
• Distinguish actual authority, ratification, apparent mandate, and the protection of third persons after termination.
• Identify personal fault and the separate conditions for the mandator's responsibility for resulting injury.

Disclosed representation and contractual effects

Under art. 2157 CCQ, a mandatary acting within the mandate in the mandator's name and on the mandator's behalf is not personally bound to the contracting third person. Art. 2160 CCQ makes the mandator answer for acts performed in the execution and within the limits of the mandate, subject to the exception where agreement or usage makes the mandatary alone bound. Identify both the authority and the terms of the resulting transaction.

Disclosure (dénonciation) should convey representative capacity and a sufficiently identifiable mandator when the transaction is made. The doctrine begins from the presumption that a person dealing with another acts personally. A representative relying on a different capacity therefore needs evidence of timely, sufficient disclosure. A recognizable entity name, an accompanying authority document, and the signature language may establish it together.

The mandator need not be described through every possible corporate detail. The information must nevertheless permit identification, where appropriate through a simple search. Ambiguous initials or a vague assertion that the signer acts “for investors” can leave the actual cocontractant uncertain. Disclosure of identity and disclosure of every internal instruction are different matters: the representative does not necessarily have to reveal the entire internal mandate.

Suppose an authorized purchasing representative signs “for Atelier Boréal inc.” and the order identifies that company as buyer. The ordinary contractual claim lies against the company. If the same person signs only their own name while the negotiations identify no company, a later invoice request in the company's name does not automatically erase the signer's initial commitment. Analyse what the supplier knew at formation, rather than rewriting the transaction from subsequent accounting preferences.

Undisclosed mandate and the mandator's direct action

An undisclosed mandate (mandat clandestin), including a nominee arrangement (prête-nom), involves a mandatary who acts in their own name without revealing representative capacity. Art. 2157 CCQ makes that mandatary personally bound, while preserving the third person's rights against the mandator where applicable. A private arrangement allocating the burden internally cannot, by its mere existence, deprive the contracting third person of the undertaking it received.

Nominee arrangements can be valid, but their use does not validate fraud or permit evasion of mandatory rules. Establish the real agreement, its lawful purpose, the property or rights involved, and the authority actually conferred. Payment by someone other than the nominal buyer is relevant evidence; it does not invariably prove whether the money was advanced under a mandate, lent, or transferred for another reason.

The third person may have recourse against both the personally committed mandatary and the mandator under the applicable mandate rules. The doctrine recognizes solidarity where insufficient disclosure or a nominee arrangement makes both answerable for the contractual obligation. Establish the mandate and the basis binding each defendant before seeking that consequence; shared involvement alone is insufficient. The internal obligation to discharge the mandatary under art. 2152 CCQ concerns obligations contracted within the mandate, with specified exceptions for ratification and ignorance of its ending. That internal duty should not be confused with a release obtained from the creditor.

Art. 2165 CCQ allows the mandator, after revealing the mandate, to sue the third person directly for obligations undertaken toward the mandatary acting personally. The third person retains defences against each and may invoke incompatibility between the mandate and the terms or nature of the contract. A transaction dependent on the named person's particular identity therefore requires special attention. If the mandatary has already sued, the mandator must assert the right through intervention in that proceeding. Later revelation can support this direct action without retrospectively eliminating the mandatary's original personal commitment.

A disclosed mandate with an unnamed mandator

Partially disclosed mandate (mandat semi-clandestin) means that representative capacity is known but the mandator's identity is withheld. This differs from pretending to be the sole personal contracting party. Art. 2159 CCQ provides specific consequences where the representative agrees to reveal the mandator within a fixed time and fails to do so, or is required to keep the name confidential: the mandatary becomes personally bound.

The same article addresses the representative who knows that the mandator being identified is insolvent, a minor, or under adult tutorship or a protection mandate, and fails to mention that fact. The doctrine confines this particular disclosure rule to the partially disclosed mandate. It should not become a universal rule making every representative of an identified entity the guarantor of its solvency.

Where the parties validly arrange deferred identification, record the deadline, the required disclosure, and the proof of receipt. Revealing the name according to that arrangement can produce the intended representative effect. A vague promise to disclose “eventually” invites disputes about what was agreed and whether the statutory conditions were satisfied.

For example, a buyer's representative declares the capacity and agrees to identify the buyer within five days. They then remain silent beyond that period. The analysis concerns art. 2159 CCQ and the agreed deadline. If the buyer was identified from the beginning, the special partially disclosed regime is not the proper starting point. Fraudulent statements or other personal faults remain separately actionable under their own conditions; adequate identification is not permission to deceive.

Acts exceeding authority

An excess of powers (excès de pouvoirs) requires comparison between the juridical act actually performed and the authority conferred. The relevant restriction may concern price, subject matter, duration, joint action, or a requirement for further approval. A contract whose commercial subject fits the assignment may still exceed an approval restriction. Conversely, necessary incidental powers can exist even without a clause spelling out each procedural step.

Art. 2158 CCQ makes the mandatary who exceeds authority personally bound to the contracting third person unless that person had sufficient knowledge of the mandate or the mandator ratified the acts. Sufficient knowledge must concern the authority relevant to the disputed transaction. Merely knowing that someone is a representative does not establish awareness of an undisclosed restriction.

When the third person knowingly contracts outside the representative's authority, art. 2158 CCQ does not supply the same protection as it does for an uninformed third person. Without ratification or another applicable basis, the third person cannot impose the unauthorized act on the mandator either. A separately undertaken guarantee of authority or ratification must be analysed as its own commitment.

An equipment supplier receives written instructions showing that the representative can solicit quotations but cannot purchase. The representative nevertheless signs an immediate order, and the supplier knowingly accepts. The supplier's actual knowledge matters even if the order looks commercially sensible. If the document instead expressly authorizes purchases up to the relevant amount, the initial premise of excess may fail. Preserve the complete authority document, its amendments, and the communications available when the supplier agreed.

Ratification: informed adoption of an unauthorized act

Ratification (ratification) is the mandator's adoption of an act performed without authority or beyond its limits. Under art. 2160 CCQ, the mandator is also bound by unauthorized acts ratified afterward; art. 2158 CCQ addresses the associated effect on the representative's responsibility for excess of powers. Ratification operates retroactively on the authority defect. It should not be described as extinguishing every possible claim concerning the representative's behaviour.

The mandator must have the necessary capacity and powers, know the relevant act, and manifest an intention to adopt it. For a legal person, determine whether the person or organ purporting to ratify can do so. Ratification cannot make a prohibited transaction lawful or cure every independent source of nullity. Its function differs from confirmation (confirmation), which concerns renunciation of a right to invoke relative nullity. Keep the defects and remedies distinct.

Express ratification can clearly identify the contract and unauthorized terms accepted. Tacit ratification can emerge from conduct that establishes informed approval: knowingly performing the contract or accepting its benefits may be relevant. Receipt of statements or silence alone proves little where the mandator did not understand what had been done. The circumstances must support both knowledge and adoption, rather than merely administrative inaction.

Art. 2153 CCQ presumes ratification where the act was performed in a manner more advantageous than the one indicated. The presumption is rebuttable. A lower headline price is not conclusive if it conceals worse delivery, additional security, or a longer commitment. Compare the actual transaction as a whole with the authorized arrangement. The person invoking ratification should identify the approving act or facts supporting the presumption and anticipate the evidence offered to contradict that conclusion.

Worked application: price advantage and hidden duration

Factual Scenario

Hypothetical. A mandator authorizes a one-year service purchase for $24,000. The representative signs a three-year agreement at $20,000 annually. The mandator pays the first invoice believing it concerns the authorized one-year arrangement.

Apparent mandate and reasonable belief

Apparent mandate (mandat apparent) protects a third person in circumstances where the representative lacked the relevant actual authority. Under art. 2163 CCQ, someone who allowed another to be believed their mandatary can be bound as if there were a mandate toward a third person contracting in good faith, subject to the statutory preventive-measures defence. The doctrine analyses absence of authority, the third person's good-faith error, reasonable grounds, and their connection to the apparent mandator.

Actual authority should be addressed first. Tacit acceptance under art. 2132 CCQ concerns formation of a real mandate. Implied powers under art. 2136 CCQ and art. 2137 CCQ concern the scope of real authority. Apparent mandate supplies an external protective effect when the relevant actual authority is absent. These can be pleaded as alternative explanations of the evidence; they should not be collapsed into one undifferentiated finding.

The third person's belief must concern power to perform the particular act, and reasonable grounds must exist when that act is concluded. Later conduct may be relevant to ratification but cannot be transplanted into the earlier state of knowledge. The doctrine evaluates both the third person's actual experience and the objective prudence of the reliance. Reasonable probability of authority is the relevant inquiry, not proof of certainty.

An assigned role, established dealings, forms, correspondence, and conduct allowed by the apparent mandator may combine to support the belief. A job title alone cannot establish authority for any imaginable transaction. Authority to collect ordinary payments does not necessarily suggest authority to forgive a substantial debt. Identify the transaction's character, its scale, the established practice, and any warning that called for clarification.

Attribution, verification, and preventive measures

The representative's unsupported assertion cannot alone manufacture authority against a stranger to the transaction. The inquiry concerns what the apparent mandator did or allowed to occur. Conduct can be active or passive: furnishing transactional forms, presenting someone in a relevant role, or allowing a foreseeable misunderstanding to continue may matter. Where statements pass through another corporate representative, examine the organization and circumstances that connect the appearance to the alleged mandator.

Verification is contextual. The third person must use reasonable means to clarify genuine doubt; the obligation is not an absolute requirement to obtain every internal document. Corporate rules governing internal formalities may affect the inquiry, but they should not be confused with proof of the entity's identity or an unlimited licence to ignore obvious irregularities. An unusual personal-payment request or an explicit approval condition can make further inquiry necessary.

Good faith (bonne foi) is presumed, but the third person still needs evidence establishing the factual basis of the apparent mandate invoked. The apparent mandator can challenge reasonable grounds or show knowledge of the lack of authority. Art. 2163 CCQ also allows proof of appropriate measures to prevent an error that the circumstances made foreseeable. Merely maintaining a private restriction unknown to those predictably relying on the appearance may be inadequate.

Suppose a business repeatedly accepts routine orders signed by its purchasing coordinator, whom it introduces to a supplier as handling procurement. A new routine order may support a claim of actual or, alternatively, apparent authority. A demand for the supplier to send a large refund to the coordinator's personal account raises a materially different question. The earlier ordering practice cannot mechanically validate the new act. The supplier's response to that warning becomes part of the proof.

Personal fault and responsibility for injury

The allocation of contractual obligations does not absolve the mandatary from personal fault (faute personnelle). Art. 1457 CCQ can support extra-contractual liability where the representative breaches an independent duty of conduct, causing injury. A claimant should identify that duty and its breach, rather than merely reproduce the allegation that the mandator failed to perform a contract. Deceitful statements, diversion of property, and other wrongful conduct require fact-specific analysis.

The mandator's contractual responsibility under art. 2160 CCQ is distinct. Once bound to the third person, the mandator cannot simply answer a performance claim by blaming the representative. The representative's fault in performing the obligation does not by itself remove the mandator's contractual undertaking. Internal recourse against the mandatary is a separate issue.

Art. 2164 CCQ addresses injury caused by the mandatary's fault in executing the mandate. Where the mandatary was not the mandator's subordinate, the mandator may prove inability to prevent the damage. Where that relationship of subordination exists, this particular defence is unavailable. All underlying conditions, including fault, injury, causation, and the connection to execution, remain to be established. A general assurance that the representative acted independently is insufficient proof of the statutory defence.

For example, a representative knowingly gives false information during negotiations and the third person incurs a loss in reliance on it. Examine the representative's personal conduct and the mandate's connection to that conduct. Then assess the mandator's position under art. 2164 CCQ, including what instructions, training, or intervention could have prevented the injury. An intentional fault is not a categorical exemption for the mandator, and the available reparation cannot be duplicated simply because more than one defendant is responsible.

Substitution and authority after termination

Unauthorized substitution has its own external rule. Under art. 2161 CCQ, the mandator may repudiate the substitute's acts if the substitution lacked authorization or justification and the mandator suffers injury. Repudiation (répudiation) is the expression of refusal to be bound. Absence of permission alone does not establish the complete statutory defence; examine prejudice and actual repudiation. The original mandatary's internal responsibility must be considered separately.

Extinguished powers differ from powers that never existed. Art. 2162 CCQ binds the mandator, or heirs after death, for acts within the former mandate after its ending where they are necessary follow-up, cannot be postponed without risk of loss, or the third person did not know of termination. These are distinct statutory situations. The claimed act must still be related to the execution and limits of the former authority.

Art. 2181 CCQ specifically protects a third person unaware of revocation where only the mandatary was notified, while preserving the mandator's recourse against that mandatary. The proof should establish the former powers, the ending event, the later act, and the third person's knowledge. The doctrine does not impose a general duty to repeatedly verify the survival of previously established powers.

For a representative formerly authorized to place freight orders, an ordinary order after undisclosed revocation raises this protection. A later purchase of an unrelated building does not become enforceable merely because some freight authority once existed. Effective termination management therefore includes notification suited to existing dealings and withdrawal or correction of circulating evidence of authority, together with the final internal obligations explained in the companion lesson.

Practice Checklist

• Identify the transaction, exact mandator, disclosed capacity, signature, and knowledge at formation.
• Establish actual authority and each relevant limit before invoking alternative external protections.
• Separate undisclosed mandate from agreed deferred identification and test the applicable disclosure rule.
• For ratification, prove capacity, knowledge, adoption, and the particular defect being cured.
• For apparent mandate, establish reasonable contemporaneous grounds linked to the apparent mandator and examine verification and preventive measures.
• Separate contractual commitment, personal fault, responsibility for another's fault, and internal recourse.
• For substitution or termination, apply the specific statutory conditions and avoid recovery exceeding the established entitlement.