Table of Contents
1. What is an authorization contract?
2. How long is the authorization contract valid for?
3. Can an authorization contract be unilaterally terminated?
1. What is an authorization contract?
According to Article 562 of the Civil Code 2015, it is stipulated as follows:
“Article 562. Authorization contracts
Authorization contract means an agreement between parties whereby an attorney has the obligation to perform an act in the name of a principal. The principal is only required to pay remuneration if so agreed or so provided by law.”
2. How long is the authorization contract valid for?
Pursuant to Article 563 of the 2015 Civil Code, it is stipulated as follows:
“Article 563. Duration of authorization
The duration of the authorization shall be as agreed by the parties or as provided by law. If there is no agreement and the duration is not provided by law, the authorization contract shall be effective for one year from the date on which the authorization is made.”
According to the above provisions, the duration of authorization shall be agreed upon by the parties or prescribed by law; if there is no agreement and no provision of law, the authorization contract shall be effective for 01 year.
3. Can an authorization contract be unilaterally terminated?
Pursuant to Article 569 of the 2015 Civil Code, the unilateral termination of the performance of an authorization contract is stipulated as follows:
“Article 569. Unilateral termination of performance of authorization contracts
1. Where an authorization involves payment of remuneration, the principal has the right, at any time, to terminate unilaterally the performance of the contract but must remunerate the attorney in proportion to the acts performed and compensate for loss and damage. If the authorization does not involve payment of remuneration, the principal has the right, at any time, to terminate the performance of the contract, subject to giving reasonable prior notice to the attorney.
A principal must notify [any] third person73 in writing of the termination of the performance of the contract by the principal. If the principal fails to do so, any contract with [any such] third person shall remain in effect, unless such third person knows or should know of the termination of the performance of the contract.
2. Where an authorization does not involve payment of remuneration, the attorney has the right, at any time, to terminate unilaterally the performance of the contract, subject to giving reasonable prior notice to the principal. If the authorization involves payment of remuneration, the attorney has the right, at any time, to terminate unilaterally the performance of the contract and must compensate for any loss and damage caused to the principal, if applicable.”