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Chapter 5. Representation and Power of Attorney Article 163. Representation

1. A transaction which is entered into by one person (representative) on behalf of another person (represented) by virtue of the authority based on power of attorney, legislation, a resolution of the court or on an administrative act, shall directly create, alter or terminate the civil rights and obligations of the represented.

The authority may also be clear from the situation in which the representative is acting (salesman in retail trade, cashier, etc.).

2. The rights and obligations shall be acquired directly by the represented in respect of the transaction entered into by the representative.

3. A representative may not enter into transactions on behalf of the represented, neither with himself personally, nor with any other person whose representative he is at the same time.

4. The persons who act, although in somebody else's interest, but in their own name (commercial intermediaries, executors of will in inheritance etc.) shall not be representatives, nor the persons who are authorised to enter negotiations with regard to transactions which are possible in the future.

5. It shall not be allowed to enter through a representative into transactions which by their nature may be entered into only in person, nor into other transactions in the cases specified in legislative acts.

Article 164. Representation of Incapable Persons

On behalf of incapable persons, transactions shall be entered into by their legitimate representatives, - parents (adopters) and guardians.

Article 165. Representation Without Authority

A transaction which is entered into on behalf of another person by the person who is not authorised to enter into the transaction, or in excess of their powers, shall create, alter or terminate the civil rights and obligations of the represented only in the case of the subsequent approval by him of that transaction.

The subsequent approval by the represented shall make the transaction valid from the moment of its commitment.

Article 166. Commercial Representation

1. The person who permanently and independently represents entrepreneurs in their concluding agreements (a commercial representative), shall act on the basis of a written agreement which contains indications of the authority of the representative, and in the case where such indications do not exist,- also of the power of attorney.

2. A commercial representative may at the same time represent the interests of various parties of an agreement which is concluded with his participation. In that respect, he shall be obliged to execute the instructions given to him with the diligence of a usual entrepreneur.

3. A commercial representative shall have the right to claim payment of the remuneration owed and the expenses incurred by him when executing the instructions of the parties to the agreement in equal shares, unless it is otherwise stipulated in the agreement between them.

4. A commercial representative shall be obliged to keep secret the information which became known to him concerning commercial transactions, also after the implementation of the assignment entrusted to him.

5. Special considerations concerning commercial representation in certain spheres of entrepreneurial activity shall be established by legislation.

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