Explanation of Article 495
The article addresses a number of actions that involve a conflict between the interest of the agent in the sale and the interest of the principal; the agent is prohibited from these actions by virtue of his obligation not to exceed the limits of the agency and to exercise care for the benefit of his principal.
The first paragraph clarifies that the agent in the sale is not allowed to purchase for himself what he was appointed to sell unless with the principal's permission; because purchasing for himself what he was appointed to sell raises suspicion of prioritizing his own interest over that of his principal, and because the prohibition is based on a legal presumption that when the principal appointed someone else to sell and did not authorize him to purchase for himself through the contract, he did not intend to expand the agency to the extent that would allow the agent to purchase for himself, as this involves a conflict of interest that is not necessitated by the mere representation.
What is contained in the paragraph is an application of the provision of Article (93) prohibiting the agent from contracting with himself if he is not authorized to do so, and Article (356) prohibiting the agent from purchasing for himself if he is not authorized to do so.
The second paragraph clarifies that just as the agent in the sale is prohibited from purchasing for himself, he is also prohibited from selling to his ascendants, descendants, spouse, or anyone whose purchase would bring a benefit to the agent or relieve him of a burden, such as his manager at work, unless with the principal's permission; because selling to any of these parties involves suspicion that the agent aims to derive a benefit for himself or them from this transaction, and thus does not safeguard the principal's interest in what he sells; the guarantees for protecting the principal's interest are not sufficiently available in this transaction.
The principal's permission for the sale, whether in the agent's purchase for himself or his sale to his ascendants, descendants, spouse, or anyone who would bring him a benefit or relieve him of a burden, makes the contract binding on the principal whether the permission was prior to the transaction or was a subsequent approval; because the prohibition was for his benefit, he is allowed to waive it, and if the principal approves the sale, the approval is retroactive to the time of the sale, not the time of the approval.
The principal cannot argue the non-effectiveness of the sale against the buyer's successor if that successor acquired a real right in exchange in good faith, in application of Article (357).
Related To
Article 495
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The agent may not, without the principal’s authorization, purchase for his own account the thing he was appointed to sell.
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The agent may not, without the principal’s authorization, sell a thing to his ascendants, descendants, or spouse, nor sell it to a person the agent, in dealing with him, would make a gain or avoid a loss.