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The Liability of the Agent Who Conducts Business without
Authority
The liability of the agent who conducts business without authority
is regulated under Article 527 of the TCO. Under this article, the agent
is liable for negligence. The cases where the liability of the agent is
judged more leniently are also explained under Article 527.
Accordingly, if the agent acted in order to avert damage or immi-
nent damage to the principal, his liability is judged more leniently. The
TCO speaks of “imminent damage to the principal” besides “present
damage to the principal”, while in the previous Code of Obligations, it
was stipulated that if the agent acted in order to avert present damage
to the principal, the agent’s liability is judged more leniently.
Under the same article, it is regulated that where an agent’s activ-
ities are carried out against the express or otherwise recognizable will
of the principal, and the prohibition was neither immoral nor illegal,
the agent is also liable for chance occurrences. If the agent proves that
the damages would have occurred due to chance occurrences without
his involvement, he may be released from liability.
Lack of Capacity of the Agent Who Conducts Business without
Authority
Article 528 of the TCO regulates that where the agent lacks capac-
ity to enter into contractual commitments, he is liable for his agency
activity only to the extent that he is enriched as a result of such com-
mitment or he is liable for his agency activity in the amount which he
alienated in bad faith. However, liability in tort is reserved.
The Rights and Obligations of the Principal
Agency in the Principal’s Best Interest
Article 529 regulates the principal’s rights and obligations where
the agent carries out activities in the interest of the principal.
The obligations of the principal within the framework of the article:
1) Principal is obliged to reimburse the agent for all expenses that
were necessary or useful and appropriate in conducting their
LAW OF OBLIGATIONS
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