Cyprus - Andreas Neocleous & Co

CYPRUS
CYP/11
Mandatory, Prohibited or Reserved Activities or Purposes
Section 156 of the Contract Law provides that where one person acts on behalf
of another without that person's knowledge or authority, the latter may elect to
ratify or to disown such acts. If he ratifies them, the same effects will follow as
if they had been performed with his authority.
Ratification may be express or may be implied by the conduct of the person on
whose behalf the acts are done, but there can be no valid ratification by a person
whose knowledge of the facts of the case is materially defective. 11
An authorized act done by one person on behalf of another which, if done with
authority, would have the effect of subjecting a third person to damage, or of
terminating any right or interest of a third person, cannot by ratification be made
to have such an effect.
Operational Aspects
Actual (Express) or Implied Authority
An agent who is appointed by a contract must act in accordance with the terms
of that contract and may not exceed his authority. The authority of an agent may
be actual (express or implied) or apparent. Actual authority is the authority
which the principal has given the agent wholly or in part by means of words or
writing (express), or is regarded by the law as having been given to him because
of legal interpretation or the relationship and dealings of the two parties
(implied).
An actual authority is a legal relationship between principal and agent created by
a consensual agreement to which they alone are parties. Its scope is to be
ascertained by applying ordinary principles of construction of contracts,
including any proper implications from the express words used, the usage of the
trade, or the course of the business and the parties. Where the express authority
is not clear the court will interpret it.
Apparent authority involves the assumption that there is no authority at all.
Under this doctrine, where a principal represents that another person has
authority, he may be bound as against a third party by the acts of that person
within the authority which that person appears to have; in such a case the
principal may be bound although he had not given that person such authority or
had limited that authority by instructions not made known to the third party. The
authority, express or implied, of every agent is confined within the limits of the
powers of his principals.
If an agent deals on his own account in the business of the agency without first
obtaining the consent of his principal and acquainting him with all material
circumstances which have come to his own knowledge on the subject, the
11 Contract Law, Cap 149, ss 157–158.
(Release 2 – 2013)