Analysis of the Lawsuit for Invalidation of the Condition Waiving the Principal’s Right to Dismiss the Attorney within a Separate Binding Contract, Incorporated in Official Powers of Attorney Due to the Non-Realization of the Separate Binding Contract, with Emphasis on Judicial Practice

Abstract

One of the conditions that is included by default in the overwhelming majority of official powers of attorney is the following statement: “The principal, within a separate binding contract, waived his/her right to dismiss the attorney.” Pursuant to Article 679 of the Civil Code, agency (wakālah) is a revocable contract, such that the attorney may terminate and dissolve it through resignation. Likewise, the principal may terminate the said contract and bring its legal existence to an end by dismissing the attorney. An exception exists where the agency or the non-dismissal of the attorney has been stipulated within a binding contract. In such a case, the revocable nature of the agency contract does not change, and the legal effects and rules governing its termination due to the death or legal incapacity of either party, in accordance with Article 954 of the Civil Code, remain fully applicable. However, the dismissal of the attorney is not possible so long as the aforementioned binding contract and the condition incorporated therein have neither become invalid nor been dissolved. Accordingly, the authors maintain that the primary prerequisite for the enforceability of a condition prohibiting the dismissal of an attorney, stipulated within a separate binding contract, is the proper establishment and proof of the existence of that binding contract. In other words, it must be demonstrated and verified that such a binding contract has genuinely and validly come into existence both in the legal sphere and in external reality, in compliance with the general requirements governing the validity of contracts and legal transactions. In cases of doubt, the presumption of non-existence applies. Therefore, the mere inclusion of this phrase in official powers of attorney, unless the concurrence of the contracting parties’ intentions to conclude the separate binding contract is established through admissible evidentiary means, cannot be regarded as proof of the realization of such a contract. Consequently, where the principal brings an appropriate action seeking the invalidation of the aforementioned condition on the ground that the referenced contract was never realized, and the court is unable to ascertain the existence of such a contract, the condition incorporated therein becomes invalid due to the absence of the separate binding contract itself. As a result, the agency contract retains its revocable nature, and the principal remains entitled to dismiss the attorney. Given that judicial decisions addressing this issue are exceedingly rare in judicial practice, the present study constitutes a step toward strengthening both the theoretical and practical dimensions of this concept as an innovative approach within Iranian judicial practice and the legal system.