Self-dealing

With the legal concept of Insichgeschäfts (also self-contraction ) is in German private law , a transaction referred to someone as a contractor on one side with himself and for another page as representatives of a third party or as a substitute two or more parties (double or multiple representation) concludes. The self-dealing is regulated in § 181 BGB .

General

With the exception of unilateral legal transactions , legal transactions are usually concluded by at least two different legal entities . In a sales contract, for example, the buyer and seller face each other. The self-business is characterized by the fact that there is actually only one legal subject and would therefore conclude a contract with itself, i.e. buyer and seller would come together in one person. This construction is made possible by the fact that the buyer acts as a representative of the seller or vice versa. The deputy acts as a buyer in his own name and as a deputy in the name and for the account of the represented seller, so that the declaration of intent is directly effective for the represented seller. Since there is a risk of conflicts of interest or abuse , the legislator has dealt with this legal issue .

Legal situation in Germany

principle

In the representation rights in accordance with § 181 BGB self-dealing only allowed if the concerned contract partner representatives, the self-contracting have allowed or the transaction exclusively to fulfill an obligation serves. It is typical of self-business that it lacks a business partner in terms of its external appearance.

example

The ( shareholder ) managing director of a GmbH (GGF) buys property for the GmbH that belongs to him himself. Here a property purchase contract is concluded in which only one person actually appears. On one hand, this person is organ of the buyer, for example, the owner-manager of the corporation , on the other hand it is retailers in their own right as a private individual . In order for such a legal transaction to be effective, the corporation must exempt its representative from the initially generally effective prohibition of self-contracting. Corporations initiate this in favor of their representative body (here: shareholder-managing director) for tax reasons. The exemption from § 181 BGB is entered in the commercial register. A legal transaction that was made despite the prohibition of self-contracting is pending ineffective until it has been approved .

The self-contracting prohibition serves primarily to restrict conflicts of interest . It is also obvious that such self-dealing goes hand in hand with a great risk of abuse. The person acting in the manner described can, for example, give away the assets of the person he represents to himself or otherwise favor himself through the business. For this reason, there is a requirement for a statutory exemption requirement for self-dealing. In the case of guardianship (today in German law: “ care ”), the rule “the guardian cannot buy things from the ward” already applied in Roman law ( Latin tutor rem pupilli emere non potest ).

In an analogous application, Section 181 of the German Civil Code (BGB) comes into effect if the identity of persons is artificially abolished in a self-dealing transaction by the acting person engaging another representative. The Reichsgericht did not apply § 181 BGB for such constellations . Today, the prevailing opinion is that this deliberate device does not change the conflict of interests, which is why there is scope for the applicability of § 181 BGB.

Legal representation

Parents, in their capacity as legal representatives of their children, may conduct legal transactions for themselves and on their behalf ( Section 164, Paragraph 1, Section 1629, Paragraph 2, Sentence 1, Section 1795, Paragraph 1, No. 1, Paragraph 2, Section 181 of the German Civil Code) generally do not make, such as making a gift at the expense of the child to the parents. However, if the business is “only legally advantageous” for the child, ie if the donation is made by the parents in favor of the child, the prohibition of self-contracting is teleologically reduced , because the protective purpose of the norm is not undermined by the act. In other cases, German law provides for the option of appointing a supplementary carer or the decision of the family court to replace the parents' declaration of intent . The same applies if a guardian , a carer or a legal guardian is active. In the case of persons of legal age, the supervisory court takes the place of the family court or, in the case of the curator or the executor, the probate court .

German civil law also prohibits other bodies from conducting self-dealing in accordance with Section 181 of the German Civil Code. However, this is a dispositive right . That means: if the representation itself was established by a legal transaction, the representative can be exempted from this requirement.

The exemption of a proxy from the prohibition of self-contracting according to § 181 BGB leads to the exceptional need for a form of power of attorney. In the event that a formal requirement is circumvented by engaging a representative, the power of attorney must be issued in the form of the main transaction, contrary to the wording in Section 167 (2) BGB, e.g. B. in the case of a land purchase contract (notarial certification according to § 311b BGB). Only the exemption from the prohibition of self-dealing does not yet make the notarial certification of the power of attorney necessary; something else applies if the intended or factual irrevocability is added. Factual irrevocability is e.g. For example, if the principal can no longer revoke the contract due to illness, or if the date of the conclusion of the contract is so close to the date on which the power of attorney was granted that a possible revocation option is completely theoretical.

An exception to the prohibition of self-contracting is the case in Section 181 of the German Civil Code (BGB) that the transaction was carried out solely to fulfill a liability (this usually relates to the transaction in rem ). So z. B. a legal representative or an authorized representative can obtain the reimbursement of expenses to which he is legally entitled ( § 670 , § 1835 BGB) from the assets managed by the person represented.

Legal situation in Austria

In Austria, self-dealing is subject to certain limits with regard to the inherent conflict of interests. General regulation is § 1009 ABGB , it is expressly mentioned in § 6, paragraph 4 of the Association Act . According to this, transactions of an organ union representative with the association require the approval of another organ administrator authorized to represent or manage the company.

Legal situation in Switzerland

The term self-dealing is also used in Switzerland . It is regulated in Art. 32 ff. OR .

The Federal Supreme Court has consistently ruled that self-contracting is fundamentally inadmissible because it “regularly leads to conflicts of interest and is therefore not covered by the company's purpose”. The contracting of the agent with himself should only be able to develop legal effects in exceptional cases, in particular if either the risk of the person represented being disadvantaged due to the nature of the legal transaction is excluded (e.g. "purchase of goods with clearly defined market or stock exchange prices"), or if the representative "specifically authorizes the representative to conclude a contract with himself, which may also be tacit under certain circumstances or approve the transaction retrospectively".

The Federal Supreme Court wants to see the same requirements applied to the legal representation of legal persons by their organs (whereby the term “representation” is misleading, since according to the theory of reality the organs are part of the legal persons themselves). Here, the Federal Supreme Court determines that the contract must be approved by a higher-level or subsidiary body if there is a risk of disadvantage for the legal person.

However, there is no risk of discrimination (and thus also the obligation to obtain approval from a superordinate or subsidiary body) if there are no other shareholders in the AG in addition to the body that has contracted itself. The Federal Supreme Court has rejected the additional requirement that, in addition to the absence of further shareholders, there may be no corporate creditors. Sole shareholders are therefore free to enter into individual deals.

The rules of self-contracting should also be applied analogously to proprietary transactions, namely in all those cases where the third party has recognized or should have recognized the conflict of interest. In these cases, it does not matter whether the conflict of interest in the specific case actually worked to the detriment of the person represented. The analogous application therefore only relates to certain cases; a general analogous application is therefore clearly rejected.

As part of the reform of the GmbH, the requirement of written form for contracts that the company representative entered into was introduced in the stock corporation law (Art. 718b OR), the GmbH (Art. 814 para. 4 OR) and the cooperative law (Art. 899a OR) himself enters into, with the exception of contracts for ongoing business in which the company's performance does not exceed CHF 1,000.

Conflicts of interest, particularly in connection with self-dealing or related matters, such as transactions with related parties, entail reputational risks. Accordingly, careful handling and proper communication of the facts are important. This includes the traceability of such transactions and appropriate disclosure in the annual report. Based on the information disclosed, approval can be given by higher-level bodies.

Individual evidence

^ ^A ^b Dieter Medicus : Civil law. A presentation for exam preparation, arranged according to the requirements. Heymanns, Cologne 1968. 23rd, revised edition with Jens Petersen : Vahlen, Munich 2015, ISBN 978-3-8006-3908-3 , Rnr. 112-113.

^ Jens Petersen: Insichshops , JURA 2007, p. 418; Thomas Lobinger : Self-dealing and fulfillment of a liability - A contribution to the historical-systematic restriction of § 181 last HS BGB , AcP 213 (2013), p. 366.

^ RG , judgment of September 27, 1924, Az. V 367/23, RGZ 108, 405, guiding principle .

↑ Patrick Rösler: Formal neediness of the power of attorney , NJW 1999, 1150 (1151).

↑ BGH , judgment of February 23, 1979, Az. V ZR 171/77, full text = NJW 1979, 2306 = DNotZ 1979, 684.

↑ OLG Schleswig , judgment of May 4, 2000, Az. 2 U 19/00, full text = DNotZ 2000, 775 = MDR 2000, 1125.

↑ Help.gv.at self- dealing

↑ GmbH law / company law Austria, topic self-dealing

^ RIS information system: decision-making texts on self-dealing

↑ Association Act (VerG) , as of August 1, 2015

↑ Control of conflicts of interest in company law. Judgment of the Federal Court 127 III 332 of May 2, 2001 and 4C.397 / 1998 of June 15, 1999. Comments ( Memento of the original of September 24, 2015 in the Internet Archive ) Info: The @1@ 2 archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. by Bettina Stutz and Hans Caspar von der Crone .

↑ ^a ^b ^c ^d ^e BGE 126 III 361 , E. 3a.

↑ Heinrich Honsell / Nedim Peter Vogt / Wolfgang Wiegand / Rolf Watter (eds.): Basel Commentary on Swiss Private Law, Code of Obligations I , Art. 1-529 OR, 3rd edition, Basel 2004, N. 19 on Art. 33 OR.

↑ BGE 93 II 461 , E. 6a.

↑ BGE 126 III 361 , E. 3a; Art. 718 ff. OR.

↑ BGE 126 III 361 , E. 5a. On the one-man company instead of many: Meier-Hayoz Arthur / Forstmoser Peter, Swiss Company Law, 9th edition, Bern 2004, no. 25 on § 16.