Liability of Unrecognized Associations: Commentary on Order No. 10490 of 2024
The recent Order No. 10490 of April 18, 2024, issued by the Court of Cassation, addresses a crucial issue in the law of unrecognized associations: the liability of those acting in the name and on behalf of such entities. This matter is of particular significance, considering the increase in unrecognized associations and the need to clarify the boundaries of their legal operations.
Prerequisites for Liability under Art. 38 of the Civil Code
The Court, in its decision, confirmed that the liability provided for by Article 38, paragraph 2, of the Civil Code is strictly linked to the actual performance of transactional activities on behalf of the association. Therefore, merely holding a representative position is not sufficient to incur liability; proof of concrete activity undertaken is necessary.
LIABILITY OF THOSE ACTING FOR THE ASSOCIATION Liability under Art. 38 of the Civil Code - Prerequisites - Mere holding of association representation - Sufficiency - Exclusion - Concrete performance of transactional activity for the association - Necessity - Burden of proof on the plaintiff - Case law. The liability referred to in Article 38, paragraph 2, of the Civil Code always presupposes a transactional activity carried out by the person acting in the name and on behalf of the unrecognized association, creating obligatory relationships between the latter and third parties. Consequently, this liability is not linked to the mere holding of representation of the association, but rather to the transactional activity actually performed on its behalf. The burden of proof, therefore, lies with the party invoking such liability in court to prove the concrete activity carried out in the name and interest of the association, with proof of the position held within the entity being insufficient. (In application of the aforementioned principle, the Supreme Court confirmed the appealed judgment which found such liability in the signing of banking contracts in the name and on behalf of the association, within the limits of the assumed obligations).
Burden of Proof and Practical Implications
A fundamental aspect emerging from the order is the burden of proof on those invoking liability. It is not enough to demonstrate holding a position within the association; concrete evidence of actions taken on behalf of the entity must be provided. This implies greater attention from those representing unrecognized associations regarding the documentation of their activities.
- Importance of recording activities undertaken
- Necessity of written contracts for operations performed
- Legal risks arising from poor management of representation
Conclusions
In conclusion, Order No. 10490 of 2024 represents an important clarification on the liability of unrecognized associations. It emphasizes that the mere holding of representation cannot be a sufficient prerequisite for attributing liability, instead requiring a thorough analysis of the transactional activity actually performed. This emphasis on the burden of proof makes it essential for those operating within these entities to manage their actions carefully and with proper documentation, in order to avoid unfavorable financial and legal consequences.
