ALICJA BIEŃ & ALICJA TARKOWSKA LAW OFFICES & PARTNER OFFICES
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author of the study
NAVIGATION
The concept of a contract of mandate
A contract of mandate involves the mandatary committing to perform a specific legal act for the mandator or a third party.
A contract for services does not necessarily have to be paid, which will be discussed below. It is worth noting at the outset that a contract for services differs from an employment contract in that the contractor maintains independence from the principal – there is no service relationship. A contract for services also requires special trust between the parties.
Legal status of the contractor
As a rule, the contractor acts as the direct representative of the principal – the contract of mandate has the same effect as if the principal had granted the other party a power of attorney. However, when the contract of mandate includes a legal act that requires a special form for its effectiveness (e.g. a notarial deed), the contract of mandate must also be concluded in such a form.
Note! When the contract of mandate also covers legal representation, it is necessary to grant a separate power of attorney.
However, the contract may expressly exclude acting on behalf of the principal – then the contractor acts in his own name, but on the principal's account. In such a case, the contractor must transfer to the principal everything he has obtained for him after the legal act has been performed.
Payment
As a rule, an assignment is paid for – if there is nothing to suggest that it is free of charge, it is assumed that the assignment is paid for. An assignment may be free of charge when the parties so decide in the content of the agreement, or when it results from the circumstances – e.g. from a permanent practice between the parties, family ties.
The amount of the contractor's remuneration may result from the tariff applicable on the market, as well as from an expert opinion, a price list established by one of the parties in the contract template, as well as the minimum statutory remuneration. The parties may establish remuneration in the form of a specifically designated amount, but also in the form of indicating the basis for its determination, e.g. by means of an hourly rate.
It is also possible to make the remuneration dependent on achieving the effect desired by the client – the so-called Success fee.
If the parties have not agreed on the amount of remuneration and the content of the contract does not indicate that it is a free contract, the remuneration must correspond to the work performed – its level of complexity and workload.
Obligations of the Parties
The contractor independently decides on the manner of performing the contract, within the limits provided for in its content. The principal has the right to provide instructions and change them, although sometimes, as in the case of the possibility of the principal interfering in the content of legal opinions prepared by legal advisers, this right is subject to limitations.
The person accepting the order may, without the prior consent of the principal, depart from the manner of performing the order indicated by him if it is impossible to obtain consent and there is a justified reason to assume that the principal would agree to the change if he knew about the existing state of affairs.
The contractor may entrust the execution of the order to a third party. However, there are certain restrictions: this can only happen if it results from the agreement, from custom (e.g. legal representation), or if he is forced to do so by circumstances. The substitute is liable to the principal for the execution of the order! The substitute is also liable to the contractor.
The person accepting the order should provide the principal with the necessary information about the course of the case, and after the order has been completed or after the contract has been terminated earlier, submit a report to him. The contractor is also obliged to return to the principal everything that he obtained for him during the execution of the order, even in his own name, but also documents.
The principal should reimburse the contractor for expenses incurred in order to properly execute the order, together with statutory interest from the date they were incurred, and release him from any obligations incurred in order to execute the order.
If the order requires expenses, the principal must, at the request of the recipient, provide an advance payment. However, the parties may agree otherwise.
If the assignment is paid, the remuneration is due to the contractor only after the assignment has been completed, unless the parties have agreed otherwise.
In the case of a contract of mandate, the issue of notice is as follows:
- The principal may terminate the order at any time, but is obliged to reimburse the contractor for the incurred expenses, as well as pay the appropriate part of the remuneration (for the activities performed).
- The contractor may terminate the contract at any time, however, if the assignment is paid (which is usually the case) and the termination was without a valid reason, the person accepting the assignment is liable for the damage.
- The parties cannot waive in advance (e.g. in the contract) the right to terminate the contract for important reasons.
The regulations concerning the mandate do not specify the notice period. This means that if the parties do not specify the notice period in the contract, the mandate contract may be terminated at any time. However, it is common practice for the parties to include a provision in the mandate contract regarding the notice period that applies to them.
Service contracts
A very important provision concerning the contract for services is Article 750 of the Civil Code, which states that the provisions on contracts for the provision of services that are not regulated by separate provisions shall apply accordingly.
This means that the provisions on mandate apply not only to typical mandate relationships, for example the legal relationship between a client and a lawyer, but also to a very wide range of service contracts that are not otherwise specifically regulated in the Civil Code.