Refuse acceptance of goods with prima facie power of attorney? The devil is in the details!

"If someone authorized to represent another enters into a contract on his behalf, the represented person, and not the representative, becomes entitled and obligated." This is stated in Article 32 of the Code of Obligations - as far as it is relatively clear. But what happens if there is actually no authorization, but the supplier assumes in good faith that it exists? If the employer has created the appearance of a corresponding authorization to the outside world, the representative effect nevertheless comes into effect on the basis of Art. 33 Para. 3 OR. The good faith of the supplier is protected insofar as he has not acted carelessly. This is intended to strengthen legal certainty in commercial dealings.

What is a prima facie power of attorney?

A so-called "prima facie power of attorney" may already exist, for example, if an employee uses the employer's business stationery or e-mail address, at least if he orders items that correspond to the company's business purpose. This would, for example, easily be affirmed in the case of a large order of meat for a restaurant, but not for a trust company. The quantity must also be correct; if an employee orders a few boxes of chocolate bars for a kiosk, a prima facie power of attorney would be assumed, but not if a ton of chocolate is ordered.

When may goods acceptance be refused?

If, for example, an employee is entered in the commercial register with individual signing authority and the supplier is not aware of any internal restrictions on the power of representation, the purchase agreement also binds the employer and the latter must pay the purchase price. However, if there is already a lack of appearance of authorization, the supplier must take action against the employee if the employer does not subsequently approve the contract (Art. 38 para. 1 CO). If the authorization is not given, the employee is liable unless he proves that the supplier knew or should have known of the lack of authorization. In other words, the employer may only refuse to accept the goods if there is neither an expressly announced nor a prima facie power of attorney.

Verify signing authority

Conclusion: As a supplier, things must not get this far in the first place. The creditworthiness check is also accompanied by a check of the authorization to sign. This requires reliable information from a reliable partner!

To the author:
Raoul Egeli has been President of the Swiss Creditreform Association since 2008 and President of Creditreform International since 2014, as well as a member of the Chamber of Commerce of the SGV. He is also Managing Director of the Creditreform Egeli companies in Basel, St. Gallen and Zurich. From 2009 to 2013, he was the central president of TREUHAND|SUISSE. Raoul Egeli is the author of several specialist books on the subject of credit and receivables management. www.creditreform.ch