Explanation of Article 505
The article refers to one of the reasons for the termination of the agency, which is the agent's renunciation of their agency.
The first paragraph of the article clarifies that the agent may renounce the agency if it does not concern the interest of others, provided that the agent informs their principal of the renunciation.
The second paragraph clarifies that if the agency involves the interest of others, such as when the agent is entrusted with settling a debt owed by the principal from the principal's funds held by the agent, the agent may not renounce the agency unless three conditions are met: the first condition is the existence of serious reasons justifying the agent's renunciation. The second condition is that the agent informs the third party whose interest is involved in this agency of the renunciation. The third condition is that the agent grants the third party sufficient time to take appropriate measures to protect their interest involved in this agency. If these three conditions are not met, the agent may not renounce their agency.
The third paragraph establishes a general rule that the agent, in all cases where they renounce the agency, must continue to perform the tasks they have started until reaching a stage where there is no risk of harm to the principal. This paragraph generally includes all cases of agency without compensation, whether or not they involve the interest of others, or if they involve the interest of others and the three conditions outlined in the second paragraph are met; because those conditions relate to the interest of others, not the principal's interest. Even with those conditions met, the agent remains obligated to their principal to continue performing the tasks they have started until reaching a stage where there is no risk of harm to the principal. The consequence of the agent violating this paragraph by renouncing the agency at a stage where harm befalls the principal is that the renunciation is valid, but the agent must compensate the principal for the damage caused by their renunciation before reaching a stage where the principal is safe from danger.
The fourth paragraph clarifies that if the agency is for compensation and the agent renounces it at an inappropriate time or without an acceptable justification, the renunciation is valid, and the agency contract ends. However, the agent must compensate the principal for the damage caused by this, as the agent's renunciation in this case is arbitrary and warrants compensation. It becomes clear that the scope of compensation the agent owes to their principal in the case of renouncing a compensated agency is broader compared to an uncompensated agency; in a compensated agency, the agent is required to compensate if the renunciation occurs at an inappropriate time, even if the renunciation is from a task not yet started, or if the renunciation is without an acceptable justification. In contrast, in an uncompensated agency, the agent is only required to compensate if they renounce the agency in a task they have started and have not reached a stage where there is no risk of harm to the principal, and it is not required that the renunciation be for an acceptable justification; if the agent renounces the agency without an acceptable justification at a stage where there is no harm to the principal if they do not continue the tasks they started, they are not required to compensate.
Related To
Article 505
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The agent may withdraw from the power of attorney if no third party has an interest therein, provided that he notifies the principal of such withdrawal.
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The agent may not withdraw from the power of attorney if a third party has an interest therein, unless he has substantial justification for such withdrawal. In case of withdrawal, the agent must notify the third party and provide him with adequate time to take any action he deems appropriate to protect his interest.
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In all cases, the agent shall continue to perform the acts he commenced until he becomes certain that no harm may be sustained by the principal; otherwise, he shall be liable for compensation.
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If the power of attorney is for a fee and the agent withdraws therefrom at an inappropriate time or without an acceptable justification, he shall be liable to compensate the principal for any harm arising therefrom, even if such withdrawal occurs prior to commencing an act under the power of attorney.