Legal Updates

An agent may not represent the principal in legal proceedings without explicit authorization

February 21, 2019

Within a share purchase agreement the seller remained, until completion of the transaction, a signatory and representative of the additional shareholder. Later he repudiated the transaction and even filed a claim, on behalf of the company, against the purchaser.
The Court held that the shares were sold and the claim filed by the company is cancelled because the company did not duly authorize it. Under law, an agency does not apply, absent explicit authorization, on proceedings before legal instances. The former shareholder was appointed in the agreement as signatory of the company, but an explicit resolution is required in order to authorize him to file a claim on behalf of the company. Thus, the claim is cancelled because it was filed without authority.