When the Intermediary Oversteps the Mark: Negotiorum Gestio or Self-Enrichment?

By mr. Vincent Besters

Introduction

You have engaged an agent or intermediary to conclude a deal on your behalf. A sensible choice, given that you lack the time, contacts or market knowledge to do so yourself. But what if that intermediary, in the course of carrying out his duties, also steers an advantage towards himself, without your knowledge? You then find yourself at the intersection of two legal doctrines that are regularly confused in practice: negotiorum gestio and unjust enrichment. A recent judgment of the Amsterdam Court of Appeal (ECLI:NL:GHAMS:2024:860) draws a sharp line between the two and makes clear what consequences this holds for entrepreneurs who make use of intermediaries.

Negotiorum Gestio: Acting in Another's Interests Without a Mandate

Negotiorum gestio, governed by Article 6:198 of the Dutch Civil Code (DCC), arises when a person voluntarily and consciously assumes the management of another's affairs without having been given a mandate to do so. Consider a commercial property agent who, without explicit instruction, takes it upon himself to secure a favourable offer on your premises while you are temporarily unreachable. The law places on the gestor an obligation to act as a diligent manager of another's affairs would: carefully, in the interest of the principal, and not in his own interest. Negotiorum gestio is therefore altruistic by definition. The moment the intermediary places his own financial gain at the forefront, he departs from the domain of negotiorum gestio and enters, legally speaking, far more dangerous territory.

The Boundary: When Does Negotiorum Gestio Tip Into Self-Enrichment?

Consider the following: an entrepreneur engages a commercial property agent to sell his business premises. The agent finds a buyer, but secretly agrees with that buyer on a mark-up above the agreed asking price. This mark-up flows directly to the agent, without the selling entrepreneur's knowledge. Formally, the agent is acting within the scope of his mandate, he sells the property, but at the same time diverts a financial benefit to himself that rightfully belongs to his principal. This is no longer negotiorum gestio; this is a textbook case of unjust enrichment within the meaning of Article 6:212 DCC, combined with a breach of the agency relationship under Article 7:418 DCC. In its 2024 judgment, the Amsterdam Court of Appeal emphasises that an intermediary who acts outside the scope of his authority and enriches himself in doing so may be doubly liable: both for the loss suffered by the principal and for the disgorgement of the unlawfully obtained benefit. The mere existence of a contractual relationship therefore does not relieve the intermediary of his duty to act with full transparency.

What Does This Mean for You as an Entrepreneur?

The practical consequences are considerable. First, you should be aware that an intermediary who acts outside the scope of his authority, even if he ostensibly acts in your name, does not in principle bind you, nor does he cause you to bear the resulting loss yourself if you had no knowledge of it. The unauthorised act may be annulled or reversed. Second, as the injured principal you have an independent claim in unjust enrichment: you may recover what the intermediary has unlawfully appropriated. Third, and this is the most practically significant point, you may, on the basis of Article 7:418(2) DCC, annul the agreement if the agent had a conflicting interest that he failed to disclose to you. Always ensure, therefore, that the precise scope of your intermediary's authority is recorded in writing, including an explicit prohibition on accepting remuneration from third parties without your prior consent.

Conclusion

The judgment ECLI:NL:GHAMS:2024:860 reinforces what has long been established in law but is too often disregarded in practice: an intermediary is not a free agent at liberty to pursue his own agenda once he has gained your trust. Negotiorum gestio and agency are legal constructs founded on loyalty to the principal. An intermediary who breaches that loyalty and enriches himself in doing so is not merely in breach of contract, he also risks claims in tort and unjust enrichment. As an entrepreneur, you would be well advised to secure your legal position contractually from the outset, so that you are not left litigating over matters that could have been settled on paper beforehand.

Do you have questions about agency or contractual liability?

Mr. Vincent Besters advises entrepreneurs on contract law, agency arrangements and liability issues. Feel free to get in touch for an initial consultation.

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