The Scope of Apparent Agency in Iranian, Egyptian, and Selected European Legal Systems and International Conventions

Mahdi  Mohammadi Nakhjiri; Mohammad Sadeghi; Aziz  Fahimi

Authors

Mahdi Mohammadi Nakhjiri Department of Private Law, Qo.C., Islamic Azad University, Qom, Iran. Author https://orcid.org/0009-0005-8135-6264
Mohammad Sadeghi Associate Professor, Department of Law, University of Hazrat-e Masoumeh, Qom, Iran. Author https://orcid.org/0009-0005-0289-8453
Aziz Fahimi Associate Professor, Department of Law, Faculty of Law, University of Qom, Qom, Iran Author https://orcid.org/0009-0000-9462-7995

Keywords:

estoppel, agent’s excess of authority, good faith, dismissal, death of the principal, apparent agency

Abstract

Under Iranian civil law, as soon as the principal exercises the intention to dismiss the agent, the agent is deemed dismissed and the agency relationship is terminated. However, under Article 680 of the Iranian Civil Code, the legislator considers the agent’s knowledge of their dismissal a condition for the effectiveness of such dismissal. Accordingly, until the agent becomes aware of the dismissal, the law continues to deem that person an authorized agent. Thus, apparent or constructive agency may be understood as the legal presumption that a dismissed agent remains authorized where the agent is unaware of the dismissal by the principal. This is because, by initially appointing the agent, the principal has created an appearance of authority capable of inducing a third party to rely on that appearance when entering into a legal transaction with the agent. Apparent agency stands in contrast to actual agency, which is based on the existence of a genuine legal relationship between the principal and the agent. By virtue of the legislator’s presumption that the dismissed agent continues to possess authority, the principal becomes bound vis-à-vis third parties to perform the obligations undertaken by the dismissed agent. The Iranian legal system, drawing upon Imami Shiʿa jurisprudence, limits the scope of apparent agency under Article 680 of the Civil Code to the dismissal of the agent and does not extend it to circumstances such as the principal’s legal incapacity, death, or bankruptcy. By contrast, Egyptian law, which is influenced by Hanafi jurisprudence, together with the use of analogical reasoning and the legal systems of certain European countries, including France, Lithuania, Germany, and England, adopts a broader scope extending beyond dismissal, primarily to protect the rights of third parties and agents on the basis of good faith. This broader approach, however, has not received adequate attention in Iranian law. The doctrine of estoppel in English law, the abstraction principle in German law, and the protection afforded to third parties under French law and international legal instruments demonstrate that extending the scope of constructive agency may generate significant economic and judicial benefits. Accordingly, expanding the application of the doctrine embodied in Article 680 to other modes of termination of agency appears necessary.

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