Tereza Händlová on agent authorisation
In a text for EPRAVO.CZ, a junior associate of Bříza & Trubač attorneys-at-law described the main principles of an important Supreme Court ruling regarding the authorised agent’s authority in the event of a conflict of interest between the agent and the represented.
Exceeding of the agent’s authority is typically a situation where the agent, for example the director of a company, acts in spite of the fact that there is such a conflict between his interests and interests of the represented person (the company in question) that the due representation is prevented. (For example, when a company’s director buys a car owned by the company – the company’s interest is to have the highest possible price, while the interest of the director is exactly the opposite.)
In this ruling, the Great Senate of the Supreme Court sided with the until then minority view according to which an agent’s conduct in an unlawful conflict of interest, of which the person with whom it was negotiated knew or must have known, leads to the fact the represented party is not bound by such conduct, unless it was subsequently approved by the represented.