Mandate – What it is, definition and concept

That is, the mandate is a kind of agreement by which a person undertakes to carry out an order on behalf of a third party.

The mandate is a consensual contract and the confidence of the person who makes the order (principal) on the person who must carry it out (agent) is very important.

The mandates can be determined for a single legal transaction or they can be abstract, that is, they give the possibility of representation in all legal transactions of some scope.

Characteristics of the mandate

The main essential notes that define this figure are:

• This contract is formed between two parties. The person who needs another to do certain legal business on their behalf (principal) and the person who receives the assignment (agent).
• The contract can be formed by several principals who entrust orders to a representative.
• The agent acts on behalf of and in the interest of the principal.
• The assignments that are the object of the mandate must be determined, possible and lawful.
• The mandate can be express or tactical. It can be granted in public or private deed.
• It can be either a bilateral or a unilateral contract.
• As a general rule, the mandate is free. But you can agree on retribution for the president.
• The principal must have sufficient capacity. That means the principal cannot be a minor.
• The mandate is revocable at the will of the principal.

Obligations of the parties

Both agent and mandate have certain obligations:

Principal’s obligation

These duties are as follows:

1. Pay compensation: Only in those cases that are agreed.
2. Advance funds so that the president meets his objective or reimburse the expenses that the president himself has anticipated.
3. In case of damages due to the fulfillment of the mandate contract, compensate the damages.

Obligation of the agent

The duties of the agent are the following:

1. Fulfill the order.
2. Respond for damages arising from non-compliance with what was ordered.
3. Account for operations to the principal.
4. Payment of interests.

Causes of extinction

How is this type of contract terminated? Here we see the ways to finish it:

• Revocation of the mandate: The principal decides to remove the order from the agent.
• Resignation of the agent: Just as the principal can unilaterally terminate the mandate contract, the president can also resign in a unilateral declaration of will. You don’t need to justify your resignation. However, if the principal is harmed by this waiver, he must indemnify the principal to the principal.
• Death or insolvency of the principal or the agent.

Different from the figure of the legal mandate that we have studied in this article is the mandate of central banks. This mandate is not a voluntary representation contract, but it is the establishment of the form of fulfillment of each priority objective (such as monetary stability) established by each central bank.