Summary

A person acting on behalf of another individual usually operates within the framework of powers that for him or her are based on a special deed—granting of authorisation or warrant. However, practice knows cases in which a person enters into a transaction on behalf on another individual without having any authorisation for that, while a third party in good faith believes that he or she has been dealing with the representative. In order to protect the interest of a third party in the creation of the legal consequences desired by him or her, §183 (1) of the Civil Code of the Russian Federation provides that the failure to approve a deal by a prima facie representee grants the third party the right to request execution from the prima facie representative. However, as in the case of effecting a deal with a prima facie representative the third party does not wish to bring about a legal consequence against the prima facie representative but against the prima facie representee, it would be unfair to ensure the interest of the prima facie representee equally also in the case in which the conduct of the prima facie representee is conducive to the prima facie nature of his or her grating of an authorisation. That is why in such a case the prima facie representative according to §174 of the Civil Code of the Russian Federation develops authorisation that conforms to the substance of the information held by the third party regarding the authorisation or an authorisation based on prima facie entitlement (Rechtsschein) as a result of which the deal effected by the prima facie representative who is from now on an unauthorised representative enters into force without its approval by the representee.

The article explains the nature of authorisation created on the basis of prima facie entitlement, the prerequisites for and content of their creation, focussing above all on the relevant regulation of the Russian Civil Code. According to the authors, Chapter 10 of the Civil Code of the Russian Federation should set out that the authorisation is created based on prima facie entitlement only for a prima facie representative effecting a deal on behalf of an entrepreneur.