PARALLEL MIRRORS: IS THE POWER OF AGENCY A TRUE POWER?

Abstract

Under art. 1295 of the Romanian Civil Code, the entitlement of a representative is qualified as a power. Under these circumstances, the title seems to be a mere rhetorical question. However, the paper tries to demonstrate that is not a black and white issue, but rather there are some shades of grey involved. Depending on the meaning of what „power” should mean in legal terms, not all cases of agency could meet the test of a true power. It appears that only the position of a director of a legal entity justifies the qualification of power.
By analyzing the position of a legal representative of a legal entity (in a hohfeldian paradigm), we emphasized several peculiar issues that shed a new light on the role of the director as agent. By using this theory, frequent questions posed to the judiciary could be answered in a simpler manner and conflicting case law could be reduced (a task that was not successful up to now through the efforts of interpretive decisions).
The main thesis is that protection of bona fide third party (that enables the agency to act as a true power) should be distinguished from the (potential) liability of the agent caused by concluding an (valid) act. The area where the limits of the power are trespassed is exactly where agency truly shows itself as a real power!