The Power of Attorney and the Mandate: Crucial Clarifications from the Supreme Court in Order No. 16374 of 17/06/2025

The law of representation, which allows one to act in the name and on behalf of another, is often complex. The Supreme Court, with Order No. 16374 of June 17, 2025, has provided a fundamental clarification on the distinction between a power of attorney and a mandate. This ruling is crucial for protecting the rights of the represented party in cases of unfaithful conduct, outlining actionable remedies and their respective statutes of limitations. An indispensable analysis for those who manage delegations or representations.

Power of Attorney and Mandate: The Key Difference

The S. v. D. judgment examines the nature of a power of attorney and a mandate. The Supreme Court clarifies that a power of attorney is a unilateral legal act that grants the representative the power to act externally in the name and on behalf of the represented party. A mandate, on the other hand, is the contract that governs the internal relationship, defining the obligations and methods of the assignment. The Court emphasizes that a power of attorney "necessarily implies an underlying relationship that justifies its issuance," usually attributable to a mandate. This correlation is vital for understanding the legal consequences of the representative's unfaithfulness.

In matters of representation, the power of attorney, as a unilateral legal act by which the represented party invests the representative with the power to perform a legal act in their name and on their behalf, necessarily implies an underlying relationship that justifies its issuance and which, in the absence of allegations of specific management relationships compatible with it, can be attributed to the mandate, distinguishing itself from it, as while the power of attorney exhausts its function before third parties, the mandate involves only the internal relationship between the representative and the represented party; therefore, since the overall relationship is governed both by the rules on representation and by those on mandate, respectively governing its external and internal aspects, the annulment of a contract concluded by the representative with themselves pursuant to art. 1395 of the Civil Code can concur with the action for damages for the unfaithful execution of the mandate pursuant to art. 1710 of the Civil Code, as these are actions based on distinct and autonomous grounds and subject to different statutes of limitations, which, in the former, is five years pursuant to art. 1442 of the Civil Code and, in the latter, necessarily ten years, given its contractual nature.

The Supreme Court's ruling highlights the dual track of the representative relationship: external (rules on representation) and internal (rules on mandate). This duality allows for different legal actions. The Court focuses on contracts concluded by the representative with themselves (art. 1395 of the Civil Code), a potential conflict of interest, and the unfaithful execution of the mandate (art. 1710 of the Civil Code), a breach of diligence and loyalty obligations.

Concurrent Actions and Statutes of Limitations

The Supreme Court clarifies the possibility of concurrent actions: the action for annulment of the contract pursuant to art. 1395 of the Civil Code and the action for damages for the unfaithful execution of the mandate pursuant to art. 1710 of the Civil Code. These actions are based on "distinct and autonomous grounds." Annulment aims to cease the effects of the vitiated contract, while damages compensate for the economic loss suffered. Crucial are the different statutes of limitations:

• Annulment (art. 1395 of the Civil Code): Five-year statute of limitations (art. 1442 of the Civil Code), running from the conclusion of the contract.
• Damages (art. 1710 of the Civil Code): Ten-year statute of limitations (art. 2946 of the Civil Code), running from when the damage manifested or could have been known.

This difference is vital: a represented party who belatedly becomes aware of unfaithfulness may have lost the right to annulment but may still claim damages within the ten-year period.

Conclusions

Order No. 16374 of 2025 from the Supreme Court clarifies the law of representation. By reiterating the distinction between a power of attorney and a mandate and the concurrency of actions for annulment and damages with specific limitation regimes, it strengthens guarantees for the represented party. It underscores the importance of transparent and diligent management of relationships, offering guidance for effective legal choices. Understanding these principles is essential for preventing litigation and acting promptly to defend interests.