La loi vos droits

Other Infosheets

Mandates

Rosalie is a sales representative for a company in the steel industry. Recently, her boss asked her if she would be willing to promote their products in Europe and North Africa for twelve weeks. Eager to discover new countries and new markets, Rosalie accepts immediately.

But after thinking about it, she realises that she has many responsibilities that won’t get taken care of while she is away: she owns a building with 25 apartments, she has to go to the bank to confirm an important change to her insurance policy, etc. Who will collect the rent from her apartment building? How can she make sure that her insurance policy is changed without any more delays? Rosalie wonders if it is possible to have someone act on her behalf.

A mandate is a contract that allows a person to act on behalf of someone else. In this Infosheet, Éducaloi informs you about the nature of a mandate, the obligations attached to it, and much more.

What is a mandate?

A mandate is a contract that allows you to choose a person who will represent you in the performance of one or more juridical acts, like contracts, transactions, steps of a legal nature, etc. If he accepts the mandate, this person, the mandatary, will act in your name when dealing with other people or companies. For example, the mandatary can be authorized to sign a contract, sell property, negotiate an agreement, etc. Basically, the mandate can involve anything agreed upon between you, the mandator, and your mandatary.

This type of contract does not require a particular form. It is, therefore, possible to give a mandate to someone verbally or in writing. But the last alternative is much safer. If there is ever a problem in the performance of the mandate, it will be a lot easier to prove what the mandate was about (its powers, limits, etc.) if it was written down.

Having a written mandate is also important because most people and institutions won’t believe your mandatary when he says, “Hi there! I am the mandatary and I am here to close the account / take the dog / get the car, etc.” They will require a written document to make sure that your mandatary has the right to act on your behalf and to make sure that they won’t be held liable for trusting just anyone against your interests.

What is a power of attorney?

In everyday language, a power of attorney is just another word for mandate. So when your children will be 18 years old, the bank will ask them to sign a “power of attorney” if they would like you to continue having access to their accounts.

More precisely, a power of attorney means two things. On the one hand, a power of attorney is the power of the mandatary to act. For example, the term is sometimes used by mandataries when they want the person with whom they are signing a contract to understand that they can act in the name of and on behalf of another person.

On the other hand, a power of attorney is the written document that describes the limits of the power to act given to the mandatary. For example, Rosalie’s power of attorney will definitely say that her mandatary can only act while she is abroad and that he can only do what she has asked him to do.

Here is some information that should be included in a power of attorney:

• The date and duration of the mandate;
  
• The names of the mandator and mandatary;
  
• The tasks that the mandatary has to perform;
  
• The mandator’s signature.

When can a mandate be useful?

A mandate is a tool that can be very useful in many situations. First of all, you can use a mandate when you can’t fulfill your obligations by yourself because you are far away, travelling, or have a scheduling conflict, etc.

Also, if you have difficulty performing certain tasks, it could be a good idea to ask someone else to do them for you. For example, Takeshi, a self-employed worker who had an accident, has difficulty walking. While he is getting physiotherapy, he can avoid the pain of walking by giving his sister Midori a mandate to collect money from his clients on his behalf.

Furthermore, when dealing with complicated financial or legal questions, many people choose to give a mandate to a professional who can represent and advise them. For example, they can ask a lawyer to deal with a lawsuit; give their income tax return to an accountant; ask an insurance broker to “shop” for the best possible insurance policy for them, etc. A mandate given to a professional is called a “professional mandate.”

Finally, a mandate can be given in anticipation of incapacity. The mandator chooses, in advance, the person who will make decisions about his health and property, if he becomes incapable of doing so himself (for example, due to an illness or accident). To find out more about this type of mandate, read our Infosheet entitled Mandates given in anticipation of incapacity  (http://www.educaloi.qc.ca/en/loi/senior_citizens/52/).

Do I have to pay my mandatary?

No. But it’s often a good incentive for a mandatary to accept the mandate! And, it’s often inevitable for professional mandates, unless your cousin who's a lawyer or your brother-in-law who's an accountant decides to do you a favour!

On a more serious note, the law states that a professional mandate is presumed to be “by onerous title” (the mandatary is paid), while a normal mandate between two individuals is presumed to be “by gratuitous title” (the mandatary is not paid). These presumptions determine the evidence that needs to be given, if there is a dispute about whether the mandate is free or not.

For example, Gina gives her accountant Kevin a mandate to complete her tax return and send it to the government. Kevin carries out this mandate. Later on, Gina refuses to pay Kevin and he sues her. The mandate says nothing about payment (which is a rare thing for an accountant!). Since the law presumes that a professional mandate must be paid, Gina will have to prove through testimony and other relevant evidence that she and Kevin agreed to a free mandate.

On the other hand, Brittany asked her twin sister Cindy to sign an agreement between the co-owners of a condominium on her behalf. Brittany and Cindy didn’t have a written mandate. Since normal mandates between two individuals are presumed to be free, Cindy will have to prove to the court that she and Brittany agreed that she will be paid $150.

What are the obligations of the mandatary toward the mandator?

First of all, a mandate is a contract that must be personally performed by the mandatary. Therefore, another person can’t replace the mandatary, unless the mandator clearly authorizes it. However, the mandatary can have an assistant to help him perform the mandate and he can delegate certain powers to the assistant, unless the mandate doesn’t allow him to do this. That being said, the mandatary remains liable to the mandator for the acts of the assistant.

The mandatary must be prudent and diligent. This means that, throughout the mandate, he must act like a reasonable and reliable person would act in the same situation. For example, Joannie has to look after Diane’s house. One day, a broken water pipe floods the basement. If Joannie waits a week before deciding what to do, she is not acting like a reasonable person, since the damage will be more serious a week later than if she acts immediately.

The mandatary must also be honest and loyal to the mandator. The mandatary must act in the best interests of the mandator. He can’t place his own interests first or use any information that he got while performing the mandate for his own benefit, unless the mandator authorizes it. The mandatary must also avoid being in a conflict of interest. He must inform the mandator about any situation that could be in conflict with his interests. For example, Noémie, who is travelling in Asia for three months, gave Octave a mandate to find her an apartment before she comes back. But Octave is also looking for an apartment for his son Simon. Octave must tell Noémie that he is also looking for an apartment for his son. And Octave definitely can’t call Simon first, if he finds a beautiful, large apartment, which is clean, sunny, and cheap!

The mandatary must inform the mandator about how the mandate is going and what is happening during the mandate, if the mandator asks him or if the contract sets out this obligation. Finally, as soon as possible, the mandatary must inform the mandator that the mandate has been completed and give the mandator an account of the mandate: inform the mandator about what he did during the mandate, justify any expenses, etc.

What are the obligations of the mandator toward the mandatary?

To ensure that the mandate will be performed in the best possible way, the mandator must fulfill certain obligations. First of all, he must cooperate with the mandatary in order to help the mandatary adequately perform his tasks.

If the mandatary asks him to do so, the mandator must advance or reimburse the amounts of money, including interest, necessary to perform the mandate. If the mandate is paid, the mandator must pay the remuneration (the pay for the mandate) to his mandatary. The mandator is also liable for any contracts, acts, and transactions undertaken by the mandatary within the limits of the mandate. For example, Robert, Rosalie’s mandatary, must collect the rent. Despite many attempts by Robert, Mrs. Murano, the tenant in Apartment 16, refuses to pay. Robert spends $15 to send a demand letter to Mrs. Murano by registered mail. When she gets back, Rosalie will have to reimburse Robert for this amount.

Finally, the mandator must compensate the mandatary for any damage suffered by him while performing the mandate, if the damage was not caused by the mandatary’s fault. For example, while collecting the rent, Robert sprains his ankle by walking into a hole that was impossible to detect. Robert could require Rosalie to compensate him for having to rent crutches, miss two days of work, and take medicine.

Can I be liable for the acts of someone who is no longer my mandatary or who is pretending to be my mandatary?

In some cases, yes. Obviously, if someone is pretending to be your mandatary when a mandate never existed between you and him, you are not liable for his acts.

The situation is more complicated if the person is your old mandatary. First of all, to make sure that you will not suffer a loss, your old mandatary must perform tasks that are a necessary consequence of what he did during the mandate or that can’t be delayed. You will be liable for these acts. For example, Marco decides to end his lawyer Catalina’s mandate. But Catalina still files the defence, which she had already prepared for Marco, at court. Otherwise, Marco would probably have missed the deadline to file the defence, which was going to expire in two days. Even though the mandate had ended, Catalina has the right to be paid her professional fees for filing the defence.

You must also make sure that the people who were dealing with your mandatary know that the mandate has ended; otherwise, you will be liable for the contracts and purchases that they enter into with your mandatary, believing that he is still acting on your behalf.

Finally, you are liable as if there was a mandate, if you let people believe that someone is your mandatary when that is not the case.

What can I do if my mandatary is doing a bad job?

If your mandatary is not performing the mandate in the way that was agreed to, you can always try to tell him about it, so that he can change his behaviour in the future.

On the other hand, if the mandate continues to be badly performed, you can end it. But, to avoid having to compensate the mandatary for any damages that he could suffer because the mandate ended, you can only end the mandate:

• For a serious reason; and
  
• At a moment that will not cause damage to the mandatary.

For example, Eva gave Vincente a mandate to buy and sell shares in various stocks. Eva thinks that Vincente is a bad mandatary because he is not telling her about the transactions he is making, even though the mandate clearly says that he has to. Although Eva has a serious reason to end the mandate, she can’t just end it whenever she wants: for example, if ending the mandate would leave Vincente with shares that he can’t resell without suffering losses. Nevertheless, if Eva chooses to end the mandate immediately, she will be liable to Vincente for these losses.

Finally, you can also choose to appoint a new mandatary. This new nomination revokes (ends) the mandate given to the old mandatary from the day that the old mandatary becomes aware of the new nomination. Practically speaking, it is obviously a good idea to tell your mandatary that he has been replaced, so that he doesn’t continue to create obligations on your behalf while carrying out the mandate.

What happens if my mandatary exceeds the powers that I gave him?

A mandatary who exceeds the powers given to him by the mandate can be held personally liable toward the persons with whom he entered into agreements, unless the mandator later approves the acts that exceeded the mandatary’s powers.

For example, while collecting the rent, Robert notices a bit of plaster peeling off the ceiling of one of the apartments (but nothing serious or urgent) and decides to hire a builder to fix it. Maintaining the apartments is not one of the tasks of the mandate given to Robert by Rosalie. Once she comes back, Rosalie has a choice: she can accept to pay the builder, or she can leave it to Robert to sort out the bill.

Does the law create automatic mandates in certain cases?

Yes. The law states that there are automatic mandates in specific cases. The law presumes that when a spouse is mentally or physically incapable of expressing her will with respect to an act related to the material direction of the family (for example, hiring a plumber to repair the leaky pipe in the bathroom), the other spouse acts as her representative and has the authority to bind both of them.

The law also states that an automatic mandate exists when a partner performs a juridical act (for example, signing a long-term lease of a photocopier) on behalf of the partnership. The partnership thus becomes liable for the juridical acts performed by its mandatary. But, the persons with whom the mandatary did business must be in good faith, meaning that they must sincerely believe that the partner was authorized to bind the partnership toward them.

It works the same way for the director of an association who is acting as the mandatary of the association’s members, or a director who acts on behalf of the legal person that he represents or of his company.

How does a mandate end?

A mandate can end in different ways, including when:

• An event makes it impossible to perform the mandate;
  
• The mandator revokes the mandate;
  
• The mandatary renounces the mandate;
  
• The mandator or the mandatary dies;
  
• Protective supervision is instituted for the mandator or the mandatary;
  
• The mandator or the mandatary is bankrupt.

A mandate also ends when its end date, set out in the mandate, arrives or when both the mandator and the mandatary have fulfilled all of their obligations under the mandate.