Commercial mandate contract in Romania
I plan to set up a company, and I would like to find out more about the commercial mandate contract and its role in the company.
The contract of commercial mandate is not defined by Law no. 31/1990 on commercial companies, nor by the new Civil Code. However, we can define this type of contract by applying art. 2009, stating that a commercial mandate contract is a form of contract whereby a party - the trustee - undertakes to conclude, on behalf of the other party called the mandate, certain legal acts which in this case represent acts of commerce.
As a rule, a commercial mandate contract is a mandate with representation, so it will end either in written form, authentic or under private signature, or verbally. The commercial mandate contract is therefore concluded by the parties' agreement.
Since we are in the realm of commercial operations, rarely free of charge, the commercial mandate contract is a contract for pecuniary interest, and the remuneration of the trustee, unless determined by the principal, will be determined according to law or custom. However, the commercial mandate contract may also be concluded free of charge, for example in the case of co-owners of a nominative or bearer action, designating a joint representative of them and expressing the intention of free of charge the commercial mandate contract.
One of the applications of the commercial mandate contract is found in the case of a company's directors. Thus, administrators are the agents of society, but they are not always representatives of society, because representation is not the essence of the mandate contract but of its nature. Another exemplary application of the mandate contract is the exercise of the right to vote at the GMS by representing it by a natural or legal person on the basis of a power of attorney or proxies to that effect.
What are the rights and obligations of the parties to a commercial mandate contract in Romania?
The rights and obligations of the parties to such a contract are those established for the general form of the mandate contract, by the provisions of the New Civil Code.
The obligations of the trustee refer to compliance with the limits set by contract by the principal, the execution of the commercial mandate with the diligence of a good owner (as it is a contract for pecuniary interest), but also the obligation to notify the mandate about the operations performed under the contract. In particular, the trustee has the obligation to execute the mandate as mandated by the principal in this respect and, in the absence of a special contract authorization, to fulfill the personal mandate.
The obligations of the mandate concern the payment of the remuneration to the trustee, the provision of all necessary means to perform the contract, including expenses related to the performance of the contract, compensation for the damage suffered by the trustee in executing the commercial mandate contract, and so on.
The rights of the parties to a commercial mandate contract are directly related to the obligations one party has towards the other. For example, the trustee is entitled to remuneration, compensation for the damage caused by the execution of the contract, etc.
Are there also situations where it is possible to revoke the commercial mandate for failure by the trustee?
Of course, one of the ways to terminate a commercial mandate contract is to revoke the mandate. The mandant may revoke this type of contract either expressly or tacitly, regardless of the form in which it was concluded or whether the contract was irrevocably declared.
The commercial mandate contract may also cease by giving up the trustee or by the death, incapacity or bankruptcy of one of the parties.
For more information on the applications of the mandate contract in any type of company, you can consult the list of lawyers specialized in this area of Darie, Manea & Associates. Our lawyers have extensive experience in resolving business issues and providing advice in this regard. You can contact us at any time and we will give you professional support on any matter.