(b) If the third party did not know at the time of the action that the agent was acting without authorization or in deviation from his authorization, he had the choice, as long as he did not become aware of the approval of the action, to see the agent as his agent or to withdraw from the action and to demand damages from the agent."
(c) A corporation may approve an action that was done on its behalf prior to its incorporation, and the provisions of this section shall apply."
- Section 18 of the Shlichut Law, entitled "Knowledge", states that:
"For the purposes of this law, a person is considered to know anything if he was a reasonable person in his opinion or if he received notice of him in the usual way."
- The rule is that when the sender created a representation in his conduct towards the third party from which it was reasonably possible to conclude that the sender was acting with authorization, the sender would be obligated to the third party, even if the sender exceeded the authorization given to him. In Civil Appeal Authority 5765/02 El Al Israel Airlines in Tax Appeal v. Zilberschlag, para. 20 (Nevo, August 26, 2009) (hereinafter: "the El Al case"), it was noted that:
"Section 3(a) of the Courier Law, which deals with the creation of an authorization, says as follows:
"The mission is granted by authorization, written or oral, by the sender to send, or by notification thereof by the sender to the third party, or by the sender's conduct towards one of them." In case law and literature, it has been noted that from this section we can learn about two main types of permissions: one type is permission granted in the relationship between the sender and the sender. This type of authorization is sometimes referred to as "internal" or "subjective" authorization. The second type is authorization created by a representation by the sender to a third party from which it is reasonable to learn that permission has been granted. This type of permission is also referred to as an "external" or "objective" permission. Objective authorization may create a mission relationship in the relationship between the sender and the third party, regardless of whether an internal authorization has been formed in the relationship between the sender and the sender" (emphasis added).
- Other Municipality Applications 1796/10 Katban v. Bank of Jerusalem Ltd., paras. 39-40 of the judgment of the Honorable Justice Danziger (Nevo December 7, 2011), the Supreme Court discussed the manner in which a mission is created by way of representation to the third party:
"It is rooted in our legal system according to which 'even though the agent acted without the sender's permission, when the sender presented an objective representation of authorization to the third party, a mission is created in accordance with the law of the courier' [...] This principle has its origin in the doctrine of "preemptive mission" that was based in English law, which is based on the rules of estoppel or [...] The meaning of "foreseeable mission" is that the sender is prevented from denying the representation he made to a third party that the sender acted with his permission, if the third party relied on the representation in good faith and reasonably and as a result changed his situation for the worse [...] In contrast to the "forward-looking mission", the sophistication of a mission by virtue of the sender's conduct towards the third party is not contingent on the third party changing its situation for the worse [...] and it is precisely that the sender's conduct will not create a mission where the third party knew, or should have known, as a reasonable person, about the lack of the agent's permission [...] It was also held in this context that the objective mission is formal in nature, and does not take into account considerations of justice. The behavior of the sender alone creates it and the requirement of reasonableness is rigid [...] It should be emphasized that the sender cannot create a shlichut by his conduct, since the representation must be that of the sender himself" (emphases added).
- In the El Al case, it was held (at para. 22) that "the reason for recognizing an external authorization as creating a mission relationship is to protect the reasonable reliance of a third party" [see also: Other Municipality Applications 3526/11 Karadi v. Cenzifer - Grain and Fodder Import Company Ltd., para. 29 (Nevo, May 6, 2013)]. Thus it was held in Other Municipality Applications 1286/90 Bank Hapoalim in Tax Appeal v. Vered Clothing, IsrSC 48(5) 799, 812 (1994) (hereinafter: "the Vered Clothing Case"), it was held that:
"The mission is an objective phenomenon. It is not a subjective phenomenon that is contingent on the will of the sender. Therefore, if the sender creates an objective representation of the agent's authorization vis-à-vis the third party, then the agent's action is seen as the sender's action ("the agent of a person like him"). In other words, the laws of deviation from authorization, which are set forth in section 6 of the Mission Law, are subject to the definitions of mission and authorization in the law. Where there is an objective representation of authorization to perform a certain action even though the sender did not authorize the sender to perform that action, there is no deviation from authorization. In the absence of a deviation from an authorization, in any case, the laws of deviation from authorization do not apply. Our legal position holds, as stated, that the mission is an objective category, and therefore if a reasonable third party knew or could have known that the sender's conduct does not constitute a representation of authorization, then there is no authorization. On the other hand, if the reasonable third party had argued that there is indeed authorization from the sender to carry out a certain legal action, then the authorization is valid and exists" (emphasis added).