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1. (a) Agency is the grant of power to an agent to do, in the name or in place of a principal, a legal act towards a third party.
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Agency and the Object of the Agency
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(b) Any legal act may be an object of agency, except an act which by its nature or under law must be performed personally.
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2. A person's agent has the same status as that person himself, and an act of the agent, including his knowledge and intent, binds or entitles, as the case may be, the principal.
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Effects of the Agency
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3. (a) Agency is conferred by written or oral authorisation of the agent by the principal, or by notice to the third party by the principal, or by the conduct of the principal towards one of them.
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Conferment and Form of Agency
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(b) Where a person is called upon to accept the act of an agent, he may refuse to recognise the agency so long as a written authorisation has not been produced and a copy thereof delivered to him.
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4. Every person is competent to perform as an agent any act which he has sufficient understanding to perform, but his rights and obligations shall be governed by the general rules of legal capacity.
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Capacity of an Agent
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5. (a) Agency extends -- unless limited by the authorisation - to any act reasonably required for the proper carrying out of its object, but it does not - except by express authorisation - extend to proceedings before any court, tribunal or arbitrator, nor to a compromise, renunciation or gratuitous act.
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Scope of Agency
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(b) An agent may do any urgent and unforeseen act reasonably required for safeguarding the interests of the principal in connection with the object of the agency even if such act exceeds the scope of the authorisation.
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6. (a) Where a person has acted as the agent of another person without being authorised to do so or in excess of the authorisation, the other person may, subject to the provisions of subsection (b), ratify the act ex post facto. Ex post facto ratification shall have the effect of prior authorisation: Provided that a right acquired by another person in good faith and for value before ratification shall not be impaired.
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Unauthorised Act
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(b) If at the time of the act the third party did not know that the agent acted without authorisation or in excess of his authorisation, he may, at his option, so long as the ratification of the act has not come to his knowledge, regard the agent as a party to the act or withdraw from the act and claim damages from the agent.
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(c) A body corporate may ratify an act done on its behalf prior to its establishment, and the provisions of this section shall apply in such a case.
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7. If at the time of the act the third party did not know of the existence of the agency or did not know the identity of the principal, the act of the agent shall bind the principal and the agent jointly and severally, but shall entitle the agent only. However, the principal may assume any right of the agent in respect of the third party save in so far as such is inconsistent with the right by reason of the nature or conditions thereof or by reason of the circumstances.
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Undisclosed Agency
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8. When a person has taken upon himself to be an agent, he shall be loyal to the principal and shall act in accordance with his instructions and, save in so far as the contrary intention appears from the nature or terms of the agency, shall-
(1) disclose to the principal any information, and deliver to him any document, relating to the object of the agency, and render accounts to him on his activities ;
(2) not, in respect of the same object, be the agent of different principals without their sanction;
(3) not, while acting as an agent, deal with himself ;
(4) not without the consent of the principal receive from any person any benefit, or any promise of a benefit, in connection with the object of the agency;
(5) not use to the detriment of the principal any information or document which comes into his possession in consequence of the agency, and generally refrain from doing anything involving a conflict between the interests of the principal and his own interest or the interests of another person.
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Fiduciary Duties of an Agent
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9. (a) If the agent infringes any of the obligations imposed on him by section 8, the principal shall be entitled to the remedies provided for breach of contract.
(b) Where the agent does any act in respect of a third party by way of infringement of an obligation as aforesaid, and the third party is privy to the infringement, the principal shall, in addition to the remedies referred to in subsection (a), be entitled to repudiate the act and to claim also from the third party .the compensation due to him from the agent.
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Remedies
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10. (a) Any property which comes into the possession of the agent in consequence of the agency is held by him as the trustee of the principal. This applies even if the agent has not disclosed the existence of the agency or the identity of the principal to the third party.
(b) The principal is entitled to any profit or benefit accruing to the agent in connection with the object of the agency.
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Property and Profits
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11. The principal shall indemnify the agent for any reasonable expenditure incurred and any liability reasonably assumed in consequence of the agency.
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Indemnification
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12. Notwithstanding the provision of section 10 (a), the agent shall have a lien on the property of the principal which came into his possession in consequence of the agency -- including property held by him as the trustee of the principal -- to an extent sufficient for the payment of his remuneration and other amounts due to him from the principal in consequence of the agency.
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Lien
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13. Debts owed by the agent to the principal, and debts owed by the principal to the agent, in consequence of the agency, may be set off against each other .
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Set - Off
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14. (a) The agency terminates upon the cancellation thereof by the principal or the agent or upon the death, loss of capacity, bankruptcy or, in the case of a body corporate, winding-up of one of them.
(b) The provisions of this section shall not apply if the authorisation ,was given for the purpose of safeguarding a right of another person or of the agent himself and such right depends on the carrying out of the object of the agency.
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Termination of Agency
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15. (a) So long as the agent does not know of the termination of the agency, he may, in respect of the principal, regard it as continuing.
(b) If the third party does not know of the termination of the agency, he may regard it as continuing; and if the agent knows of its termination, the third party shall, moreover, have the option given him by section 6 (b).
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Restrictions as to Termination of Agency
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16. An agent shall not appoint an agent for the object of his agency unless he has been expressly or implicitly authorised to do so or he does so for the purpose of an act as referred to in section 5 (b).
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Subagency
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17. (a) Where one authorisation is given to several agents, it shall be presumed that they are to act jointly.
(b) Where one authorisation is given by several principals, it shall be presumed that the agent is to act by the joint authority of all of them.
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Several Agents and Principals.
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18. For the purposes of this Law, a person shall be deemed to have knowledge of a thing if he should as a reasonable person have knowledge thereof or if he has received notice thereof in the ordinary way.
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Knowledge
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19. This Law shall not derogate from the provisions of any law regulating a particular category of agency relationships.
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Reservation of Laws
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20. The Eleventh Book of the Mejelle is hereby repealed.
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Repealing the Mejelle
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21. This Law shall come into force three months from the date of its publication in Reshumot (The Official Gazette). Relations between a principal and an agent which were created before the coming into force of this Law shall continue to be governed by the earlier law.
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Commencement and Transitional Provisions
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