Private Law Research

The legal effects of Transferring Agency

Document Type : Research Paper

Author

Mahmoud Kazemi

Associate Professor, Islamic and Private Department, Faculty of Law and Political Sciences, University of Tehran,Tehran,Iran

https://doi.org/10.22054/jplr.2024.80972.2862
Abstract
With the permission of the principal, the agent can delegate the execution of the matter of agency to another (subagent), which is named “delegation” (Tawkeel). “Delegation” can happen in two ways; either the agent employs a subagent for himself, or for the principal; but in both assumptions, despite the selection of the subagent, the agent maintains his contractual position and is still committed to the principal to perform the contractual obligations. However, it is possible for the agent to transfer the agency contract to another person with the permission of the principal. Transfer of the Contract is generally one of the issues of modern contract law, and there is no provision in this regard in Iran's Civil Code, except for limited references to some contracts.
The concept of transfer of agency contract is not different from the transfer of contract in the general sense. The transfer of the agency contract means the transfer of the contractual position by the agent or the principal; this means that the third party becomes the substitute of the agent or the principal in the agency contract. Usually, the transfer of agency is proposed by the agent. With the transfer of the agency contract, the agent is to be substituted by the subagent and his contractual position against the principal becomes dependent on him, and the agent loses his contractual position. Although the transfer of the agency contract and delegation are similar in a certain sense, they are different in certain conditions and have diverse rulings and effects. In the assumption that the agent is authorized to, he can transfer the agency contract to another person in order to execute the delegation of agency; therefore, every transfer of agency contract requires a delegation, but every delegation does not necessarily mean the transfer of agency contract.
The transfer of the agency contract by the principal is not conceivable, because due to the fact that the guardianship is subject to ownership, someone can give agency to another regarding the property or is authorized by the owner. Due to the nature of the agency contract, the transfer of it may be doubted. But in order to prove its possibility, it should be said that regardless of the legal nature and effects of the agency contract which indirectly creates obligations for the parties, the "contractual position of an agent" as a privilege can be transferred to others; it can be the subject of transaction and contract, unless there is an obstacle. The transfer of an agency contract is a contract concluded between an agent and a third party (= transferee), but the consent of the principal (= the party to the agency contract) is a condition for its validity and influence. According to the principle of consensually of contracts in Iranian law, it should be believed that the contract of transfer of agency contract is concluded by consent of contractants, and no special formalities are required for its conclusion, just as there is no need for special formalities to conclude an agency contract. Of course, it seems that in the assumption that the agency contract is officially concluded with the preparation of an official document, the transfer of the agency contract must also be done with an official document.
There is no text regarding the effects of the transfer of agency contracts in Iranian law. It seems that with the transfer of the contract, all the contractual rights created from the agency contract are transferred to the transferee. Based on this, the guardianship and authority created for the agent is transferred to the transferee with all its accessories. On the other hand, he is responsible to the principal for all the obligations that the agent had to him. However, the main question here is whether by transferring the contract and transferring the rights and obligations to the transferee, the transferor (Agent) is released from the contractual obligations in front of the contract party (Principal), or is he still committed to the performance of the contractual obligations alongside the transferee. With the lack of provision, the solution of French law can not be accepted in Iranian law; so we should believe that by transferring the agency contract, the transferor (agent) is released for the contractual obligations, unless he expressly remains committed to the performance of the obligations. In French law, the survival of the obligation of the transferor of the contract in Article 1216-1 of the Civil Code has been accepted and since the transfer of the contract requires the transfer of debt, the judgment of transfer of debt has been established regarding the transfer of the contract.
Considering the silence of the Civil Code and the lack of legal literature on the subject, in this article based on legal principles and comparative study in other legal systems, especially France, we try to prove the possibility of transferring an agency contract, state its conditions and explain its rules and effects.

Keywords

Transfer of contract
Delegation
Substitution
Transfer of agency’s rights and obligations
Ownership and guardianship
Subjects
 
References
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Private Law Research
Volume 12, Issue 47
Summer 2025
Pages 5-34

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