Determining Your Unknown Contract Partner

In business you might not always meet with your contract partner face to face – only with an agent. Believe me, “Who’s who?“ will not help here.

Determining Your Unknown Contract Partner

 The LG Kaiserslautern had to decide on a case on November 2, 2005 (re 1 S 56/05) where one person engaged in a business without knowing her partner. She was dealing exclusively with an agent. The agent, however, was not at all interested in paying for something she did not want to be held liable for from the very beginning.

§174 BGB requires of a binding agency that the agent must disclose its agency. The question arose if the represented person himself has to be identified. Is it really an obligation of the agent to reveal her customer? The court, after weighing the merits of both plaintiff and defendant, came to the following solution. If an agent discloses that she is acting on somebody else’s behalf, then that suffices for disclosing one’s agency, i.e. not acting on her own behalf. The transaction is binding for the “angel” – whoever that may be. The represented person does not have to be determined while hiring the agent; it suffices that the agent herself determines whom she represented. The person now missing her business partner is not worthy of protection because she well knew that she was not dealing with her contract partner but the agent. She willingly decided to deal with a “wildcard” in the deal.
In other words, make sure you know your dealing partner if it is of some kind of importance for you, otherwise just hand over your product or render your services after full payment.

Related Articles:

EU-Business Directive

Disregarding Written Form of Partnership Agreements