Selected Cases by Article & Issues
(1) If a contract concluded by an agent involves the agent in a conflict of interests with the principal of which the third party knew or ought to have known, the principal may avoid the contract. The right to avoid is subject to Articles 3.2.9 and 3.2.11 to 3.2.15.
(2) However, the principal may not avoid the contract
(a) if the principal had consented to, or knew or ought to have known of, the agent"s involvement in the conflict of interests; or
(b) if the agent had disclosed the conflict of interests to the principal and the latter had not objected within a reasonable time.
|1||Agent acting in conflict of interest with principal|
|1.1||Agent acting for two principals|
|1.2||Agent contracting with itself|
|2||Principal entitled to avoid contract with third party|
|2.1||Third party’s knowledge of conflict of interest required|
|3||Principal´s right to avoid the contract with third party excluded|
|3.1||Principal consented or knew of agent´s conflict of interest|
|3.2||Agent disclosed conflict of interest|