The contract was signed by an unauthorized person - consequences

The concept of an unauthorized person

Typically, unauthorized transactions occur when an unauthorized person mistakenly believes that he is acting on behalf of another person legally.
Such cases include, for example, actions without a power of attorney in the interests of others. As follows from Art. 182 of the Civil Code of the Russian Federation, in order to include a represented person in a legal relationship, it is necessary for the representative to have powers, which can be based on:

• on a power of attorney;
• normative legislative act;
• non-normative act of a government agency

or may follow from the situation.

The main document confirming representative powers is a power of attorney. A power of attorney is a written authority drawn up in the form of a separate document or included in the contents of the document in connection with which the authority appears (an example would be a decision of the general meeting of an LLC, which gives the participant the right to sign a certain agreement).

The institution of legal representation applies to both individuals and organizations. For the former, legal representation is introduced by Art. 64 of the Family Code and corresponding norms of the Civil Code of the Russian Federation. The application of legal representation to the latter will be discussed in more detail below.

The right to act on behalf of an organization without a power of attorney is granted to a number of persons by the general provisions of Art. 53 of the Civil Code of the Russian Federation, as well as special regulations:

• Art. 40 of the Law “On Limited Liability Companies” dated 02/08/1998 No. 14-FZ;
• Art. 69 of the Law “On Joint Stock Companies” dated December 26, 1995 No. 208-FZ;
• Art. 19 of the Law “On Business Partnerships” dated December 3, 2011 No. 380-FZ, etc.

In civil legal relations, subjects who carry out actions, albeit in the interests of others, but on their own behalf, in essence, only conveying the will of the illegally represented person, cannot be representatives.

Completion of a transaction by such an unauthorized person as a deputy director

Very often, organizations have a position such as deputy director (first, second, etc.). As a rule, due to job descriptions, these persons have fairly broad powers, incl. to represent the organization to third parties. In the absence of a power of attorney with appropriate powers, such a person is considered unauthorized and the provisions described in the first situation apply.

However, it is very rare that, in accordance with the constituent documents, the position of deputy director is considered as an executive body of the organization, which has the right, without a power of attorney, to act on behalf of a legal entity on the basis of the charter. Is this legal?

An example from judicial practice.

The closed joint stock company Mospromstroy filed a claim with the Moscow Arbitration Court against the closed joint stock company MFK JamilKo to declare the lease agreement invalid (void).

In support of his position, the applicant referred to the fact that at the time of signing the agreement, the first deputy general director of the company, by virtue of clause 2 of Art. 69 of the Federal Law “On Joint-Stock Companies” he had no right to act on behalf of the company without a power of attorney. At the same time, the provisions of the company’s charter, which give the first deputy general director the authority to act on behalf of the company without a power of attorney, according to the plaintiff, contradict paragraph 1 of Art. 53, art. 103 of the Civil Code of the Russian Federation, paragraph 3 of Art. 11, paragraph 2, art. 69 of the Federal Law “On Joint-Stock Companies”, which vests such rights only in the bodies of the joint-stock company.

In this regard, as the applicant believed, the disputed lease agreement on the part of JSC Mospromstroy was signed by an unauthorized person, and therefore, in accordance with Art. 168 of the Civil Code of the Russian Federation, the specified agreement is an invalid (void) transaction due to its non-compliance with the requirements of Art. 53 Civil Code of the Russian Federation, art. 69 Federal Law “On Joint Stock Companies”.

The court found that the provision of the charter of JSC Mospromstroy regarding the assignment of the deputy general director of the company to the executive body of the company contradicts Art. Art. 53, 103 Civil Code of the Russian Federation, Art. Art. 11, 69 Federal Law “On Joint Stock Companies” and is void. Since, in accordance with these norms, the executive bodies of a joint stock company can be classified as either a sole executive body (director) or a collegial body, and the agreement was signed on the part of JSC Mospromstroy by the first deputy general director, acting on the basis of the charter, the specified person, signing the controversial the lease agreement acted as a body of JSC Mospromstroy, which contradicts the provisions of the above articles.

Thus, the court came to the conclusion that the first deputy general director did not have the proper authority to act on behalf of JSC Mospromstroy, since he was not its executive body and did not have a power of attorney.

Since in this case the disputed agreement was signed on the part of JSC Mospromstroy by the first deputy general director on the basis of the charter, which contradicts the requirements of the law, then, accordingly, the agreement on the part of the plaintiff was signed by a person without authority.

Having examined the case materials, the court concluded that the parties had fulfilled the agreement and that Mospromstroy CJSC had approved the actions of the first deputy general director in concluding it.

Based on the above, the decision of the arbitration court left the claims unsatisfied. The cassation court supported this decision (Resolution of the Federal Antimonopoly Service of the Moscow District dated November 11, 2010 in case No. A40-172646/09-137-1250).

Thus, in the absence of direct approval of the transaction in the form of a concluded agreement, the actions of the deputy manager could be considered illegal due to his lack of authority to perform such actions. And the position of deputy director cannot be recognized by the executive body of the organization (this is typical for all organizational and legal forms), even if the constituent documents indicate otherwise.

Confusion between the concepts of “unauthorized person” and “unknown person”

In the event of contractual disputes regarding transactions involving unauthorized persons, attention should be paid to the fact that in law enforcement acts, judicial authorities often equate the concepts of “unauthorized person” and “unidentified person”.

Let's consider the opinions of the courts on the issue of making a transaction on behalf of another person by an unidentified person:

• as the AS of the Far Eastern District considers in the Resolution dated December 26, 2017 in case No. A51-23102/2015, an unknown person for the purpose of ascertaining the validity of a transaction is the same as an unauthorized person, and a transaction made by an unknown person is invalid under Art. 182 Civil Code of the Russian Federation;
• in the decisions of the Supreme Court of the Russian Federation dated July 26, 2016 in case No. A43-31853/2014, FAS Volga District dated April 14, 2014 in case No. A57-7502/2013, the signing of a transaction by an unidentified person is directly identified with signing by an unauthorized person, however, the transaction is invalidated according to paragraph. 1 tbsp. 168 Civil Code of the Russian Federation;
• in the opinion of the Federal Antimonopoly Service, expressed in the resolution of June 25, 2014 in case No. A51-25855/2013, the fact of signing by an unidentified person must be proven by filing a petition for falsification of evidence and initiating a forensic examination of the authenticity of the signature to identify its discrepancy with the signature of an authorized person;
• According to the resolution of the Federal Antimonopoly Service of the Moscow Region dated October 17, 2012 in case No. A40-113674\10-53-949, subsequent approval of a transaction made by an unknown person does not allow it to be declared invalid.

Thus, in law enforcement practice, the courts used the concepts “unidentified person”, “unknown person”, meaning an unauthorized person. At the same time, often the basis for recognizing a transaction made by an unknown person as invalid is its contradiction to the law (Article 168 of the Civil Code of the Russian Federation and, quite rarely, Article 182 of the Civil Code of the Russian Federation on lack of authority).

This point is very clearly explained in the appeal ruling of the St. Petersburg City Court dated May 14, 2015 No. 33-6851/2015. Recognizing the obvious consequence of signing an agreement as the unknown non-conclusion of such an agreement, the court noted that recognizing the agreement as invalid introduces the necessary certainty into the relations of the parties, and therefore court decisions to recognize the agreement as invalid are correct in essence and cannot be canceled.

The concept of apparent (implied) authority

The mere absence of a document confirming authority is not yet a basis for recognizing a transaction as concluded by an unauthorized person. In para. 2 p. 1 art. 182 of the Civil Code of the Russian Federation states that authority can also arise from the situation in which the representative acts.

In science, such authority is called apparent or implied. To recognize them, a set of circumstances is necessary in which a reasonable participant in civil transactions (counterparty to a transaction) can have no doubt that the person is vested with the appropriate powers. As an example, the code cites cashiers and salespeople in retail trade (however, courts apply this rule in other cases).

The head of the organization as an authorized representative of the legal entity

Before amendments were made to the Civil Code of the Russian Federation, the legal status of the executive body of the organization remained unclear. As a rule, it was considered an integral part of the legal entity, which made the application of Art. 174, 182, 183 of the Civil Code of the Russian Federation to the head.

For quite a long time in judicial practice there was a position according to which the head of a legal entity - the sole executive body is not its representative within the meaning of Art. 182 of the Civil Code of the Russian Federation (for example, the decision of the Arbitration Court of the Sverdlovsk Region dated May 4, 2008 in case No. A60-17892/2007-C11). There was also a similar position that did not allow defining the head of an organization as a representative, that is, an independent unit in civil circulation (for example, the resolution of the Federal Antimonopoly Service of the North-West District dated May 23, 2007 in case No. A05-11151/2006-26).

However, there were other opinions, according to which the application of Art. 182 of the Civil Code of the Russian Federation in relation to the director of a legal entity was legitimate (for example, FAS UO in resolution dated 01.03.2007 No. F09-1319/07-S5).

NOTE! Significant in resolving the issue of the legal status of the manager was the resolution of the plenum of the Supreme Arbitration Court of the Russian Federation dated May 16, 2014 No. 28, which determined that the entity performing the functions of the sole executive body of a legal entity is recognized as a representative of this organization.

This position is reflected in Art. 53 of the Civil Code of the Russian Federation, where, to determine the powers of a body of a legal entity, a direct reference to Art. 182 of the Civil Code of the Russian Federation. Despite its subsequent exclusion (Law No. 210-FZ dated June 29, 2015), the courts’ approach to the manager as the legal representative of a legal entity remained in 2015–2016, with some clarifications.

Thus, the plenum of the Supreme Court of the Russian Federation clarified in Resolution No. 25 dated June 23, 2015 that the special nature of the relationship in this case entails that only certain provisions of Chapter. 10 of the Civil Code of the Russian Federation, namely:

• pp. 1, 3 tbsp. 182, art. 183 Civil Code of the Russian Federation;
• clause 3 art. 65.3, paragraph 5 of Art. 185 of the Civil Code of the Russian Federation - for several representatives indicated in the Unified State Register of Legal Entities.

Thus, in light of recent changes in legislation, the head of the organization has finally acquired the legal status of a representative of a legal entity.

IMPORTANT! Clause 3 art. 182 of the Civil Code of the Russian Federation is not subject to application in cases where special rules are established by law for the execution of transactions by the sole executive body in relation to himself personally or another person whose representative (sole executive body) he is at the same time.

For information on how to issue a power of attorney on behalf of an organization, read the article ConsultantPlus. If you do not yet have access to the K+ system, you can get it for free for 2 days.

Legal qualification of transactions signed by an unidentified person

“Scientific Aspect No. 2-2019” - Humanities
Kheilo Artem Vladimirovich - graduate student at Moscow University of Finance and Law.
Yuzefovich Zhanna Yurievna – Candidate of Legal Sciences, Associate Professor of the Department of Civil and Labor Law, Civil Procedure, Moscow University of the Ministry of Internal Affairs of the Russian Federation named after V.Ya. Kikotya.

Abstract: The article is devoted to the legal qualification of transactions signed by an unidentified person. The article discusses the differences in approaches to the legal qualification of these transactions on the basis of judicial practice. The purpose of the article is to determine the most successful legal qualification of transactions signed by an unidentified person. The article concludes about the most optimal option for assessing such transactions based on the economic consequences for civil turnover.

Key words: Unconcluded transaction, non-existent transaction, invalid transaction, signature forgery, judicial practice, unauthorized person.

Review of judicial practice of the Supreme Court of the Russian Federation No. 1 for 2022 [1] raised an old, but, apparently, still relevant issue of the civil legal qualification of an agreement signed by an unidentified person.

This issue has been facing the highest judicial authorities of Russia for a long time and it has been resolved ambiguously by them.

For the first time, the Supreme Arbitration Court of the Russian Federation (hereinafter referred to as the SAC RF) gave civil legal qualification to an agreement signed by an unidentified person, in the Resolution of the Presidium of August 1, 1995 No. 7357/94 [2], which stated that according to the results of the examination The signature of the bank manager on the letter of guarantee was made by an unknown person, which in turn resulted in the absence of legal consequences and the non-conclusion of the agreement.

The qualification of an agreement containing a forged signature as not concluded was further developed in the resolutions of the Presidium of the Supreme Arbitration Court of the Russian Federation dated December 14, 1999 No. 5584/98 [3] and dated May 16, 2000 No. 6612/98 [4].

It should be noted that, recognizing the fact that the contract was not concluded, the court always assessed the transaction for the fact of subsequent approval in the manner established by Art. 182 of the Civil Code of the Russian Federation, noting that the case materials do not provide evidence of approval of the contract by the party on whose behalf the signature was forged.

Before judging the current approach of the Supreme Court of the Russian Federation (hereinafter referred to as the RF Supreme Court) on the qualification of an agreement signed by an unknown person for non-conclusion or invalidity, it should be noted that the RF Supreme Court distinguishes between these two concepts. Thus, in the Determination of July 7, 2015 in case No. 78-KG15-7 [5], the Supreme Court of the Russian Federation notes the differences between an unconcluded agreement and an invalid one, which in its opinion boils down to the fact that an unconcluded agreement, unlike an invalid one, does not give rise to any -there are no legal consequences and is absent in fact, that is, both in the legal plane and in actual reality, as an expression of will that carries any legal meaning.

Not all scientists agree with this approach in Russian legal science; for example, V.P. Shakhmatov, [6] D.O. Tuzov [7], do not distinguish between an invalid transaction and a void one.

Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated January 10, 2003 No. 6498/02 [8] changed the approach of the Supreme Arbitration Court of the Russian Federation to the transactions under consideration, which from this judicial act the Supreme Arbitration Court of the Russian Federation began to qualify as invalid.

Thus, in the above-mentioned case, the seller filed a lawsuit against the buyer to apply the consequences of the invalidity of a void transaction (an apartment purchase and sale agreement). After the second round of consideration of the case, the courts of the first two instances upheld the claim. The courts concluded that there was a forgery of the signatures of the plaintiff’s sole executive body in the agreement and in the acceptance certificate by the chief accountant of the company. The cassation court overturned these judicial acts and sent the case for a new trial, indicating, in accordance with the interpretation of Art. 183 of the Civil Code of the Russian Federation, the execution of a transaction on behalf of the company by an unauthorized person means that the agreement was concluded on behalf of the signatory - the chief accountant. At the same time, the company itself did not conclude a deal. The supervisory court reviewed the judicial acts upon the protest of the Deputy Chairman of the Supreme Arbitration Court of the Russian Federation V.V. Vitryansky and upheld the acts of the court of the first and appellate instances, adopted in the second round, on the satisfaction of the stated claim. The Presidium of the Supreme Arbitration Court of the Russian Federation indicated that, within the meaning of clause 2 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated May 14, 1998 No. 9, when a transaction was made on behalf of a legal entity by a person who did not have the authority to do so by force of law, Art. 174 of the Civil Code of the Russian Federation cannot be applied. In disputes of this kind, Art. 168 of the Civil Code of the Russian Federation, while clause 1 of Art. 183 of the Civil Code of the Russian Federation cannot be applied.

This legal position became widespread in the future. In these cases, arbitration courts recognize contracts signed by unidentified persons as invalid (void) transactions. They justify their position by the violation in this case of the provisions of Art. 53 of the Civil Code of the Russian Federation (a legal entity acts through its bodies), Art. Art. 153, 154 of the Civil Code of the Russian Federation (general definition of a transaction and agreement), Art. Art. 160, 434 of the Civil Code of the Russian Federation (written form of transaction, form of agreement), or are limited to a reference to Art. 168 Civil Code of the Russian Federation.

It would seem that at the level of judicial practice this issue has been resolved and does not require correction by the RF Armed Forces. However, on December 12, 2022, the Supreme Court of the Russian Federation considered a cassation appeal on the claim of Keizik A.V. against PJSC National Bank Trust [9], in which the Supreme Court of the Russian Federation regarded the signing of the agreement by an unidentified person as evidence of non-conclusion. “The court of second instance did not take into account that the lack of will of one of the parties to conclude an agency agreement is not a basis for declaring such a transaction invalid. Such a transaction may be recognized as not concluded or concluded depending on the subsequent actions of the parties named in the transaction (clause 2 of Article 183 of the Civil Code of the Russian Federation).” From the above quotation it follows, firstly, that such an agreement is not concluded, and secondly, it can be healed by subsequent approval of the transaction by the represented one.

At the same time, according to clause 6 of the Review of judicial practice of the Supreme Court of the Russian Federation No. 1 for 2022 [1], an agreement signed by an unidentified person should be considered void under clause 2 of Art. 168 of the Civil Code of the Russian Federation as a transaction that violates the requirements of the law and at the same time encroaches on the rights and legally protected interests of third parties.

It seems that the approach reflected in the Determination of the Supreme Court of the Russian Federation of December 12, 2022 No. 5 KG17-210 [9], if we adhere to the division of the categories of non-existence and invalidity of a transaction, is more correct. According to this approach, an invalid transaction and a non-existent one are not the same-order categories. Thus, a non-existent (unconcluded) transaction cannot be declared invalid, since the first one does not exist in fact, that is, in the real plane, in contrast to an invalid transaction, which does not exist only for law, that is, does not carry any legal consequences, does not trigger the mechanism of action of the rule of law that the parties or party to the transaction wanted to put into effect.

The signature confirms the will of the party to complete the transaction. A transaction is an act of expression of will aimed at creating, changing or terminating civil rights or obligations.

In accordance with paragraph 1 of Art. 432 of the Civil Code of the Russian Federation: “A contract is considered concluded if an agreement is reached between the parties, in the form required in appropriate cases, on all essential terms of the contract.” [10]

In the absence of the will of one of the parties, the contract cannot be considered a transaction, and, therefore, is not concluded.

It seems that the application of clauses 1 and 2 of Art. 183 of the Civil Code of the Russian Federation, even by analogy is not entirely correct. In accordance with clause 1 and clause 2 of Art. 183 of the Civil Code of the Russian Federation “in the absence of authority to act on behalf of another person or when such authority is exceeded, a transaction is considered concluded on behalf and in the interests of the person who completed it, unless another person (represented) subsequently approves this transaction <...> Subsequent approval of the transaction by the represented creates, changes and terminates his civil rights and obligations under this transaction from the moment of its completion.” [10] A representative, making a transaction on behalf of another person (represented), acts in accordance with Art. 19 of the Civil Code of the Russian Federation under your own name. Accordingly, when signing a transaction as a representative, he can (“has the right” and at the same time “is obligated”) to affix his personal signature. If an unidentified person signs not his own signature on his own behalf, but the signature of another person, indicating that this person’s signature is not about representation, but about an illegal attempt to impersonate another person.

If you do not delve into theoretical considerations, but are guided only by the interests of civil circulation, then both options for legal regulation have the right to exist. The legal consequences of declaring a transaction unconcluded or invalid are similar. Both options provide for a three-year statute of limitations. If restitution is applied, the parties will return to each other everything received under the invalid transaction, and if the contract is recognized as non-existent, the parties will have the right to file a vindication or conditional claim. The economic effect will be identical.

Both in the case of declaring a transaction invalid, and in the case of declaring a transaction not concluded, it is possible to apply estoppel - the principle of loss of the right to object in the event of dishonest or contradictory behavior. Clause 5 Art. 166 of the Civil Code of the Russian Federation and clause 2 of Art. 431.1. The Civil Code of the Russian Federation does not allow invalid transactions to be recognized as invalid if the behavior of the contesting party gave grounds to rely on its validity. A similar rule, only relating to unconcluded contracts, is contained in paragraph 3 of Art. 432 of the Civil Code of the Russian Federation.

The stable development of civil turnover requires predictability and the impossibility of unilateral unfair, unfounded refusal of obligations. That is, the creation for the party that has fully or partially fulfilled the obligation of a legal regime that could exclude references by an unscrupulous counterparty to the existence of grounds for recognizing the transaction as void, depriving the unscrupulous party of the transaction of the right to bring a claim for its invalidity in the case where its terms are completely or partially fulfilled by the other party. Moreover, for the principle of estoppel, it is not important whether such execution was carried out by a bona fide or dishonest party, but what is important is that the terms of the transaction were actually fulfilled, since actions to execute the transaction indicate the completeness of the person’s will. [11, p. 184]

Due to the ambiguity of judicial practice, the approach that has emerged in recent years in relation to the fact that the choice by the applicant of the wrong method of protecting the right should not entail an unconditional refusal to satisfy the claim is of particular importance. One cannot but agree with this approach of the judicial system. Corresponding explanations of the courts are available in judicial practice: regarding the choice between an invalid and non-existent transaction in paragraph 1 of the Information Letter of the Supreme Arbitration Court of the Russian Federation No. 165 dated February 25, 2014: “Since the claim brought by the plaintiff is essentially aimed at establishing the absence of a legal relationship between the enterprise and the company from the lease agreement, and the error in legal qualification that the plaintiff made, considering the transaction voidable, does not lead to a difference in consequences (this transaction was not executed by the parties), the claim cannot be rejected only on the basis of such an error.” [12] It is also worth noting the general approach of the RF Supreme Court: “Within the meaning of Part 1 of Article 196 of the Code of Civil Procedure of the Russian Federation or Part 1 of Article 168 of the Arbitration Procedure Code of the Russian Federation, the court determines which rules of law should be applied to the established circumstances. The court also indicates the reasons why it did not apply the rules of law referred to by the persons participating in the case. In this regard, the plaintiff’s reference in the statement of claim to norms of law that are not subject to application in this case does not in itself constitute grounds for refusal to satisfy the stated claim.” [13]

Thus, if we adhere to the theory of differentiation between non-existent and void transactions, it seems that an agreement signed by an unidentified person should be considered unconcluded, however, its qualification by the applicant as invalid neither from a theoretical-legal nor from a practical point of view will be considered an error. Choosing the wrong method of protecting the right should not serve as a basis for refusing to satisfy the claim. From the point of view of the needs of civil circulation, as was shown in this study, both methods of protecting rights have the same effect.

Bibliography

1. Review of judicial practice of the Supreme Court of the Russian Federation No. 1 (2019): Presidium of the Supreme Court of the Russian Federation dated April 24, 2022 // SPS Consultant Plus.
2. Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated August 1, 1995 No. 7357/94 // SPS Consultant Plus.
3. Resolution of the Supreme Arbitration Court of the Russian Federation of December 14, 1999 No. 5584/98 // SPS Consultant Plus.
4. Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated May 16, 2000 No. 6612/98 // SPS Consultant Plus.
5. Ruling of the Supreme Court of the Russian Federation dated July 7, 2015 No. 78-KG15-7 // SPS Consultant Plus.
6. Shakhmatov V.P. The components of illegal transactions and the consequences caused by them. / V. P. Shakhmatov. Tomsk: Publishing house Tom. Univ., 1967. 311 p.
7. Tuzov D. O. The theory of invalidity of transactions: the experience of Russian law in the context of the European legal tradition. / D. O. Tuzov. M.: Statute, 2007. 601 p.
8. Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation of January 10, 2003 No. 6498/02 in case No. A50-14081/2000-G-12 // SPS Consultant Plus.
9. Ruling of the Supreme Court of the Russian Federation of December 12, 2017 No. 5-KG17-210 // SPS Consultant Plus.
10. Civil Code of the Russian Federation Part 1: Federal Law of November 30, 1994 No. 52 - Federal Law. // Russian newspaper. 1994. December 8. No. 238-239.
11. Tuzov D.O. Insignificance and contestability of a legal transaction: pandect doctrine and modern law. M.: Statute, 2006. 204 p.
12. Review of judicial practice on disputes related to the recognition of contracts as not concluded: Information letter of the Presidium of the Supreme Arbitration Court of the Russian Federation dated February 25, 2014 No. 265 // Consultant Plus.
13. On the application by courts of certain provisions of Section I of Part One of the Civil Code of the Russian Federation: Resolution of the Plenum of the Supreme Court of the Russian Federation dated June 23, 2015 No. 25 // Rossiyskaya Gazeta. 2015. June 30. No. 6711 (140).

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Distinction between the concepts of “a person who has exceeded his authority” and “an unauthorized person”

To prevent consequences in the form of recognition of transactions as invalid/not concluded, it is important to distinguish between the concepts of “person who has exceeded his authority” and “unauthorized person”, since transactions made in excess of authority, unlike transactions made by an unauthorized person, will have completely different legal consequences.

So, according to Art. 173–174.1 of the Civil Code of the Russian Federation, transactions involving abuse of authority include transactions made:

• without the appropriate consent of the organization’s body;
• exceeding the established restrictions on the powers of an organization body acting on its behalf without a power of attorney;
• in violation of the prohibition or restriction on the disposal of property arising from regulations;
• executive body of the organization to the detriment of the interests of the organization.

And transactions made by an unauthorized person include only transactions of a representative (in the meaning of Article 182 of the Civil Code of the Russian Federation) who is not vested with the appropriate powers.

However, in practice, when challenging contracts, these concepts are often substituted. Indicative in this case is the resolution of the Federal Antimonopoly Service of the Eastern Military District dated December 26, 2011 in case No. A38-311/2011. As the court found, the contract for connecting and servicing the electronic system was signed by the director, whose signature was sealed by the company. At the same time, this director was early dismissed from office, from which the court concluded that the disputed agreement was signed on behalf of the plaintiff by a person who did not have the authority to sign it, with reference to paragraph 2 of the resolution of the plenum of the Supreme Arbitration Court of the Russian Federation dated May 14, 1998 No. 9. While the specified paragraph of resolution No. 9 determines the consequence in the form of invalidity for a transaction made in excess of authority.

In making a decision in this case, the court identified the head of a legal entity released from authority (unauthorized) with a person who exceeded his authority.

Thus, based on law enforcement practice, a person who has the right to act on behalf of an organization without a power of attorney, exceeding the specified powers, may also be recognized by the court as an unauthorized person.

Legislation on powers when signing a contract

According to paragraph 1 of Art.
182 of the Civil Code of the Russian Federation, representatives carry out transactions in the interests of those represented on the basis of the powers they have. Moreover, the consequences in the form of the creation, change or termination of the rights and obligations of the represented occur only in cases where the representative acted within the framework of the powers with which he was vested. The concept of “unauthorized person” is introduced by clause 1 of Art. 183 of the Civil Code of the Russian Federation, according to which a person is recognized as such who either was not vested with the corresponding powers at all, or was vested, but went beyond their limits. However, the very concept of authority and its limits is absent in the law. In the field of civil law, authority is defined as the right to act in relations with third parties (including making transactions) on someone else’s behalf.

In Russia, the idea was expressed about the need to distinguish between significant and insignificant abuse of power, depending on the consequences for the alleged represented. The excess will be significant only when the actions of the representative were not performed in the interests of the represented person. In this case, it will be possible to apply Art. 183 Civil Code of the Russian Federation.

This is similar to the rules of international law, according to which the representative has the right to take any actions if they are aimed at achieving the goals arising from the authority. In Russian judicial practice regarding the signing of an agreement by an unauthorized person, this approach also occurs (details below).

Judicial positions on the grounds for the emergence of the powers of a representative

When signing various types of agreements, caution should be exercised regarding the legality of the grounds for the emergence of the powers of the representative. Since the practice of concluding contracts is quite extensive, we recommend paying attention to some positions of the highest courts regarding the application of the rules on representation:

• the norms of the Civil Code of the Russian Federation on the grounds for the emergence of the powers of a representative apply equally to all persons with whom the representative has a legal relationship (determination of the Supreme Court of the Russian Federation dated 09/07/2000 No. KAS00-357);
• the approval of a transaction made by an unauthorized person may be evidenced by the actions of an employee of the represented person, but only if these actions are within the scope of his duties, provided for by a power of attorney or are clear from the situation (information letter of the Presidium of the Supreme Arbitration Court of the Russian Federation dated October 23, 2000 No. 57);
• the basis for the emergence/termination of the rights and obligations of the person represented in the transaction is the fact of its conclusion by the director of the branch within the framework of his powers (determination of the Supreme Court of the Russian Federation dated April 27, 1998 No. 43-B98-1k);
• the powers of a lawyer performing his duties on behalf of the company are clear from the situation (resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated June 24, 2014 No. 1332/14 in case No. A65-30438/2012);
• when an authorized bank employee concludes a bank deposit agreement with a citizen for the citizen, the powers of such an employee are clear from the situation, even if he acts contrary to the interests of the bank (Resolution of the Constitutional Court of the Russian Federation dated October 27, 2015 No. 28-P);
• violation of the procedure for delivery and acceptance of goods established by a regulatory legal act means that the powers of the person accepting the goods are not clear from the situation (decision of the RF Armed Forces dated April 20, 2015 No. 309-ES14-4692 in case No. A71-6908/2012).

Consequences for the person represented upon approval of the transaction

The transactions in question do not give rise to rights and obligations for the represented person. The Supreme Court of the Russian Federation drew attention to the fact that all claims against the represented party from such transactions are subject to rejection, except in cases where their subsequent approval is proven (paragraph 1, paragraph 123 of PP No. 25).

The person represented can declare the latter directly, but there are also actions recognized in practice that indicate approval (paragraph 2, paragraph 123 of PP No. 25):

1. Acceptance of collection.
2. Acknowledgment of the claim.
3. Request for deferment/installment plan.
4. Completion/approval of another transaction that ensures the first one or is aimed at changing or executing it.
5. Fulfillment of the terms of the transaction, acceptance of performance (full or partial), signing of the reconciliation report, payments for violation of obligations.

Thus, approval can be confirmed in writing, orally, as well as by implicit actions. Moreover, it does not matter to whom it is addressed - a representative or a counterparty.

However, approval must come from a person who is authorized to conclude this type of transaction or act on their approval (paragraph 3, clause 123 of PP No. 25). For example, the manager of an organization can approve a transaction by an employee, but other employees of the organization also have the right to do this if the corresponding actions were part of their official duties, were based on a power of attorney, or were clear from the situation (paragraph 4, paragraph 123 of PP No. 25).

Approval of a transaction means it is “healed.” The rights and obligations between the represented and the counterparty arise from the moment when it was committed (have retroactive effect).

Consequences of signing an agreement by a person without authority

Art. 183 of the Civil Code of the Russian Federation provides for measures to protect the rights and legitimate interests of the subjects of a transaction that was carried out by a person who does not have the appropriate authority. These measures include:

• Unilateral refusal of the counterparty represented in the transaction until its approval. To make such a refusal, a statement from the counterparty to the person who unlawfully completed the transaction, or directly to the person being represented, is sufficient. It is worth noting that this refusal is possible only if the counterparty of the principal did not know about the lack of authority of the person who made the transaction.
• Possibility for the counterparty to clarify the represented subsequent approval of the transaction directly from the represented person.
• The right of the counterparty to demand from the person who completed the transaction the execution of this transaction or compensation for losses as a result of the unilateral refusal of the counterparty. Losses are subject to compensation if the counterparty did not know that the person who made the transaction lacked the appropriate authority. This right of the counterparty is applicable if the principal refused to approve the transaction or did not approve it within a reasonable time.

However, despite the fact that the adoption of the above measures helps to heal a transaction made by an unauthorized person, in practice, as a rule, a number of questions arise regarding the mechanism of such healing.

When do courts accept that authority was clear from the circumstances?

Here are some examples:

1. Resolution of the AS MO dated 04/04/2017 in case No. A40-60568/2016. The defendant argued that there was no evidence of delivery of goods, since there were no documents confirming the authority of the persons who signed the invoices. According to the court, the powers of these persons were clear from the situation because:

• each time the goods were delivered to the defendant’s warehouse and handed over to the warehouse employees;
• the invoices were affixed with the defendant's seal, and persons who do not hold responsible positions do not have access to the seal;
• on falsification of invoices in accordance with Art. 161 of the Arbitration Procedure Code of the Russian Federation was not declared.

1. Resolution of the 4th AAS dated November 1, 2017 in case No. A10-997/2017. The presence of authority based on the situation was established based only on one fact of access of an employee of the organization to the premises.
2. Resolution of the 6th AAS dated July 1, 2016 in case No. A73-1743/2016. In this case, the court recovered from the defendant-buyer only part of the debt under the supply agreement, since it considered that his receipt of the goods according to a specific invoice was not proven by the plaintiff-supplier. The court took into account that:

• the invoice was signed by an unauthorized person (the text of the power of attorney was interpreted literally, the invoices did not appear in the list of documents to be signed);
• there was no stamp on the invoice;
• the plaintiff did not prove the defendant’s approval of the transaction for the supply of goods under this invoice;
• it was not proven that the goods were unloaded at the defendant’s warehouse, therefore the presence of the signatory’s authority according to the circumstances also cannot be recognized.

Refusal by the counterparty of an agreement signed by an unauthorized person

As mentioned above, when a transaction is carried out by an unauthorized person, the counterparty of the principal has the right to apply a measure that protects his rights and legitimate interests as the subject of the transaction, expressed in a unilateral refusal of the transaction by means of an appropriate statement.

In practice, the question arises: in what form should such a statement be expressed? Due to the fact that the law does not provide for a special form of notification of refusal, it seems that this statement can be expressed in any form and does not necessarily have to correspond to the form of the transaction.

To determine the method of sending a notice of refusal, we consider it possible to use clause 65 of the resolution of the plenum of the Supreme Court of the Russian Federation dated June 23, 2015 No. 25. According to this clause, a legally significant message can be sent by:

• Email;
• fax communication;
• other communications (including postal).

The decisive factor in this case is the fact that from this notification it is possible to reliably establish from whom it comes and to whom it is addressed (the represented or unauthorized representative).

How to approve a transaction if the contract was signed by an unauthorized person

Within the framework of Art. 183 of the Civil Code of the Russian Federation, a transaction made by an unauthorized person, in the event of its subsequent approval, creates for the represented all the necessary rights and obligations as if he was initially a legitimate subject under the contract.

Art. 183 of the Civil Code of the Russian Federation does not directly indicate the methods for approving a completed transaction. To answer this question, you should refer to Resolution No. 25 and information letter of the Presidium of the Supreme Arbitration Court dated October 23, 2000 No. 57.

An important criterion for the legitimacy of the actions of the person approving the transaction is the presence of confirmed authority to do so.

According to these acts of the higher courts, approval should be understood as:

• written or oral expression of will;
• recognition of the counterparty's claims by the represented party;
• conclusive actions: acceptance (including partial) of execution of the transaction, payment of interest (penalties, fines) on the principal debt, exercise of other rights and obligations under the transaction, signing a debt reconciliation act;
• concluding interrelated transactions to secure or fulfill a disputed one;
• request for postponement or installment plan;
• acceptance of collection.

Among other things, approval may be evidenced by the actions of the employees of the person being represented for the fulfillment of the obligation, provided that they were based on a power of attorney or the authority of the employees to perform the relevant actions was clear from the situation in which they acted (paragraph 2, paragraph 1, article 182 of the Civil Code of the Russian Federation) .

If, in the absence or excess of authority, the representative has concluded an agreement to amend or supplement the main agreement, paragraph 2 clause 1, clause 2 art. 183 of the Civil Code of the Russian Federation, as well as in terms of compensation for losses, paragraph 3 of Art. 183 Civil Code of the Russian Federation.

Thus, the legal consequences provided for in paragraph 1 of Art. 183 of the Civil Code of the Russian Federation, a transaction made by an unauthorized person does not occur only if the represented person directly refused to approve the transaction or did not respond within a reasonable time to the proposal for approval.

Tailor makes the man

More precisely, not just clothes, but a uniform. So, when purchasing a product, a sales contract is concluded between the buyer and the store. In this case, the seller performs actions (accepts payment, issues a check, etc.) that entail the emergence of obligations for the store (Articles 492, 493 of the Civil Code of the Russian Federation). But, you must admit, few buyers would think to demand from the seller an employment contract with the store or a power of attorney - documents confirming his authority. We are used to trusting the seller based on the situation: he puts goods on shelves or sits at the cash register in a special uniform with a “badge” on his chest. It is obvious to us as customers that the employee is authorized to enter into a sales contract on behalf of the store.

If complaints about the quality of the goods arise in the future, it will be difficult for the store to evade its obligations, for example, by stating that the seller was not registered and worked without an employment contract (although such attempts are sometimes made). The court or Rospotrebnadzor will probably reject these arguments, because we had every reason to believe the opposite (paragraph 2, paragraph 1, article 182 of the Civil Code of the Russian Federation).

Courts, as a rule, proceed from the fact that a company that itself has allowed a situation indicating that a representative has authority cannot simply “disown” him (Resolution of the Intellectual Rights Court of December 24, 2018 No. C01-966/2018 ). In this particular case, an individual entrepreneur who owns a network of children's toy kiosks, having been caught selling counterfeit bears, bunnies and chanterelles, argued that the controversial transaction, through which the counterfeit goods were introduced into civil circulation, was carried out by his employee on his own initiative, and he , individual entrepreneur, “not in business at all.”

By creating or allowing the creation of a situation indicating the presence of authority of the representative, the represented person consciously enters into civil relations in his person and therefore does not have the right to refer to the absence of labor or civil relations with him.

Sometimes the situation as the basis for representation not only replaces written authority (power of attorney), but is also possible in the absence of any properly formalized relations between the representative and the represented. Similar conclusions can be seen in other judicial acts. For example, the Resolution of the Arbitration Court of the Central District dated February 16, 2022 No. F10-84/2018 cites a situation where the director of a company tried (unsuccessfully) to prove that his chief accountant was not authorized to sign a statement of reconciliation of settlements with the counterparty, thereby recognizing the existence of a debt for company. Thus, representation “by circumstance” arises when, in a specific situation, third parties had every reason to believe that the person in front of them is a representative and he acts on behalf of the represented person.

Losses in case of unilateral refusal of a transaction if the contract is signed by an unauthorized person

As mentioned above, if the represented person refused or did not respond within a reasonable time to the proposal for approval, the counterparty of the represented person, upon refusal of the flawed transaction, has the right to demand compensation for losses from the representative.

When implementing this measure, the following circumstances must be taken into account:

• As a rule, unauthorized persons are individuals, which, in turn, may complicate collection due to the financial insolvency of the latter. For example, in rejecting the claim, the court pointed out to the plaintiff his right to demand collection of debt directly from an unauthorized representative of an individual, since the defendant did not enter into a transaction to obtain fuel cards (resolution of the 9th AAC dated March 31, 2016 No. 09AP-48167/2015 in case No. A40-26263/14).
• In the case of a claim for compensation for losses, the plaintiff must specify which expenses (income) the losses relate to: actual damage or lost profits (resolution of the Federal Antimonopoly Service of the North Caucasus Region dated 06.06.2016 in case No. A53-20583/2015).
• Establishing the fact that a transaction was concluded by an unauthorized person serves as a basis for refusing a claim arising from this transaction against the represented person, unless it is proven that the latter approved the transaction. Indicative in this case is the resolution of the 18th AAS dated April 30, 2015 No. 18AP-3722/2015 in case No. A76-21781/2014. In satisfying the claims for damages in this case, the courts relied on the fact that, despite the signing of the acts by an unauthorized person, the actual use of the disputed cranes in business activities indicates the approval of this transaction by the defendant, and therefore, the losses received by the plaintiff are subject to recovery.

In conclusion, we note that an agreement signed without the appropriate authority gives rise to the following legal consequences:

• the represented person is given the right to approve the transaction or to refuse it, as well as to not approve the latter within a reasonable time;
• the counterparty is given the right to refuse the transaction and recover damages;
• without appropriate approval, the representative becomes obliged to fulfill contractual obligations in kind or to compensate for losses incurred by the counterparty as a result of the illegitimate conclusion of the contract;
• approval of the contract by the represented in any of the above ways legitimizes the legal relationship between the represented and the counterparty under the contract, excluding an unauthorized representative from this legal relationship.

The question remains unclear regarding the status of a transaction made by an unauthorized person, in terms of invalidity (disputability, insignificance) and non-conclusion.
Considering the diversity of law enforcement practice on this issue, when resolving a controversial situation in court, it is worthwhile to be guided by the most applicable judicial position. You can find more complete information on the topic in ConsultantPlus. Free trial access to the system for 2 days.

Consequences of transactions by an unauthorized person in tax legal relations

The risks arising from the illiteracy or carelessness of the top officials of the organization, when they do not issue powers of attorney with the appropriate powers to their subordinates, but allow them to sign documents, are especially great when communicating with tax authorities.

An example from judicial practice.

The 8th Arbitration Court of Appeal upheld the decision of the Arbitration Court of the Omsk Region on the partial refusal to satisfy the claims of the Federal State Institution "Ob-Irtysh State Basin Administration of Waterways and Shipping" to the Federal Tax Service Inspectorate for one of the districts of the city of Omsk to invalidate the inspectorate's decision on additional tax assessments (Resolution of 03.03.2008 in case No. A46-4726/2007).

Having examined and examined the case materials, the court came to the conclusion that the documents confirming the expenses incurred by the Federal State Institution as a result of transactions with counterparties do not comply with the requirements of the Federal Law “On Accounting”, since they were signed by unidentified persons. Documents used to formalize business transactions with funds are signed by the head of the organization and the chief accountant or persons authorized by them.

In accordance with the legal position of the Supreme Arbitration Court of the Russian Federation, set out in Resolution of the Plenum of October 12, 2006 N 53 “On the assessment by arbitration courts of the validity of the taxpayer receiving a tax benefit,” the taxpayer’s submission to the tax authority of all properly executed documents provided for by the legislation on taxes and fees , in order to obtain a tax benefit, is the basis for receiving it, unless the tax authority proves that the information contained in these documents is incomplete, unreliable and (or) contradictory.

Since the primary accounting documents of the Federal State Institution with its counterparties were signed by an unauthorized person, they cannot be recognized as evidence documenting the taxpayer’s expenses, and also cannot serve as a basis for applying a deduction for value added tax.

Thus, a transaction made by an unauthorized person or in excess of such authority, in some cases does not entail any obligations for the represented legal entity unless he directly approves the transaction, but in other cases it can seriously affect the property interests of the organization.