Abuse of power of representation and good faith of the third contracting party

Facts

From 1978 to March 1984, X., the director of Caves Mövenpick S.A. (Mövenpick), created a parallel wine market without the knowledge of his employer. On August 29, 1983, [H.], a wine connoisseur and a client of Mövenpick, entered into two agreements with this company through the intermediary of X. In these agreements, [H.] undertook to purchase wines for more than 100,000 francs, to deposit them with Mövenpick while giving it the mandate to sell them at the purchase price plus 40%. In reality, the parties aimed at a "financial investment", the quantities and prices being secondary, or even fanciful.

[H.] brought an action against Mövenpick for the payment of 126,308 francs, only disputing one of the agreements of August 29, 1983. By judgment of January 15, 1992, the Civil Court of the Vaud Cantonal Tribunal dismissed the action. By judgment of January 19, 1993, the Federal Tribunal dismissed the appeal for reform by [H.] and confirmed the contested judgment.

Considerations

According to the Federal Tribunal, this is not a simple excess of the power of representation, but a real abuse of this power. Indeed, the representative of Mövenpick concluded the disputed transaction in his own interest and in a tortious manner, without intending to act on behalf of Mövenpick.

In a case of abuse of power of representation, the good faith of the third contracting party must be assessed solely with regard to Art. 3 para. 2 CC. The requirements as to the attention required of the third party are thus increased; even slight negligence may already admit bad faith, particularly when the third party concludes the transaction without paying attention to objective signs of abuse.

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