CONTRACT OF SILENT PARTNERSHIP
- 610. Definition of contract of silent partnership
(1) In a contract of silent partnership, the silent partner undertakes to make a specific contribution to the management of the enterprise or a part thereof and the trader undertakes to pay the silent partner a share of the profits corresponding to the silent partner’s contribution.
(2) It shall be presumed that the assets delivered by a silent partner are transferred to the property of the trader.
(3) Rights and obligations which arise from transactions concluded in the process of managing of an enterprise are created only with respect to the trader. The trader shall manage the enterprise diligently and act in good faith with respect to the silent partner.
(4) The provisions concerning contracts of partnership apply to contracts of silent partnership unless the provisions of this Chapter provide otherwise.
- 611. Transfer of rights and obligations arising from contract of silent partnership
The rights and obligations of a silent partner arising from a contract of silent partnership may only be transferred with the consent of the trader. Consent thereto may be granted in advance in the contract of silent partnership.
- 612. Withdrawal of management right from silent partner
If a silent partner has been granted the right in a contract to participate in the management of the enterprise, the trader may deprive the silent partner of such right only in the cases prescribed by the contract, in the case of a material violation of an obligation by the silent partner, or in the case of the inability of the silent partner to manage the company.
- 613. Silent partner’s inspection right
A silent partner has the right to inspect the accounting records of a trader which concern the economic activities in which the silent partner participates, and to receive a copy of the annual report of the trader.
- 614. Distribution of profits and covering of losses
(1) It shall be presumed that the profits of an enterprise are distributed and the losses covered corresponding to the relationship between the value of the enterprise and the contribution of the silent partner at the time of entry into the contract of silent partnership.
(2) Any agreement which precludes the participation of a silent partner in the distribution of profits is void.
(3) If, pursuant to the contract of silent partnership, a silent partner participates in the management of the enterprise, the silent partner has the right to receive a reasonable share of the profits for such activity. The remaining profits shall be distributed pursuant to the provisions of subsection (1) of this section.
- 615. Calculation of profits and losses
(1) A trader shall calculate profits and losses within two months after approval of the annual report and pay the share attributable to the silent partner thereto.
(2) A silent partner is not required to return a share of the profits which has already been paid thereto after subsequent losses.
(3) If a silent partner has not paid the contribution in full or the contribution has decreased due to losses, any profits created shall be used primarily to cover the contribution of the silent partner.
(4) It shall be presumed that the share of the profits which is not paid to a silent partner does not increase the contribution of the silent partner.
- 616. Death of silent partner
If a silent partner dies, the successor of the silent partner shall become the party to the contract of silent partnership. The contract of silent partnership may be cancelled by either the trader or the successor within three months after the death of the silent partner and the cancellation is effective as of the end of the financial year.
- 617. Termination of contract of silent partnership
(1) Upon the termination of a contract of silent partnership, the trader shall return the contribution of the silent partner, either increased by profits or reduced as a result of losses, within two months after the dissolution of the partnership.
(2) A silent partner shall also participate in the distribution of profits and the covering of losses which arise from any transactions not completed by the time of the termination of the silent partnership.
- 618. Bankruptcy of trader
(1) A contract of silent partnership terminates upon the declaration of the trader as bankrupt, and the silent partner may, on the basis of the silent partner’s contribution, file a claim against the trader as a creditor in bankruptcy proceedings to the extent which the contribution of the silent partner exceeds the share of the silent partner in the covering of losses.
(2) If a silent partner has not paid the contribution, the silent partner shall transfer the missing share to the bankruptcy estate in the extent which is necessary to cover the silent partner’s share in the covering of losses.
CONTRACTS FOR PROVISION OF SERVICES
- 619. Definition of authorisation agreement
By an authorisation agreement, one person (the mandatary) undertakes to provide services to another person (the mandator) pursuant to an agreement (to perform the mandate) and the mandator undertakes to pay remuneration to the mandatary therefor if so agreed.
- 620. Diligence of mandatary upon performance of mandate
(1) Upon the performance of a mandate, the mandatary shall act in a loyal manner with respect to the mandator and exercise the necessary level of diligence commensurate with the nature of the mandate.
(2) A mandatary shall perform the mandate to the maximum benefit of the mandator in the light of and according to the mandatary’s knowledge and abilities and shall prevent any damage to the property of the mandator. In addition, a mandatary who is acting for the purposes of the mandatary’s economic or professional activities shall apply the generally recognised skills of the mandatary’s profession.
- 621. Instructions of mandator
(1) A mandatary shall adhere to the instructions provided by the mandator upon performance of the mandate. A mandator shall not provide specific instructions concerning the manner or conditions of performance of the mandate in the case where the mandatary is expected to perform the mandate based on the mandatary’s professional skills or abilities.
(2) If a mandatary wishes to deviate from the instructions of the mandator, the mandatary shall inform the mandator thereof and wait for the decision of the mandator, except in the case where a delay would be likely to cause unfavourable consequences for the mandator and if it may be presumed under the circumstances that the mandator will approve of the deviation.
(3) In the case where adherence to the instructions of a mandator would be likely to cause unfavourable consequences for the mandator, the mandatary shall comply with the instructions only after the mandatary has called the mandator’s attention to such consequences and if the mandator fails to modify the instructions.
(4) A mandatary shall not be liable for violation of the obligations provided for in subsections (1) to (3) of this section if the mandator later approves of the action of the mandatary.
- 622. Performance of mandate in person
It is presumed that a mandatary shall perform the mandate in person. A mandatary also has the right to use the assistance of third parties in performing the mandate.
- 623. Conflict of interests
(1) In the case where the object of a mandate is entry into a transaction, the mandatary may concurrently be the other party to the transaction to be entered into for performance of the mandate or the mandatary of the other party to the transaction only if the possibility of a conflict of interests is precluded.
(2) In the case of a mandate specified in subsection (1) of this section, the mandatary shall inform the mandator of the mandatary’s direct or indirect interest with regard to the transaction which is the object of the mandate.
(3) A transaction entered into by the mandatary with the mandatary upon the performance of a mandate does not restrict the right of the mandatary to receive remuneration and to the reimbursement of expenses if the provisions of subsection (1) of this section have been adhered to.
(4) The provisions of subsections (1) to (3) of this section do not preclude or restrict the validity of the right of representation of a mandatary.
- 624. Notification obligation of mandatary
(1) The mandatary shall inform the mandator of all relevant facts relating to performance of the mandate, above all of facts which may cause the mandator to modify the mandator’s instructions, and, at the request of the mandator, shall provide the mandator with information on performance of the mandate.
(2) Upon performance of a mandate, the mandatary shall provide the mandator with an overview of the expenditure and revenue relating to performance of the mandate together with the documentation which is the basis for the overview.
(3) Any agreement to derogate from the provisions of subsections (1) or (2) of this section to the detriment of the mandator shall be entered into in writing.
- 625. Duty to maintain confidentiality
(1) During the performance of a mandate, the mandatary shall maintain the confidentiality of facts which become known thereto in connection with the mandate and which the mandator has a legitimate interest in keeping confidential, above all by maintaining the mandator’s production and business secrets. A mandatary is not required to maintain confidentiality if the mandator has granted the mandatary permission to disclose facts or if the mandatary’s duty to disclose arises from law.
(2) A mandatary’s duty specified in subsection (1) of this section shall continue after the expiry of the authorisation agreement to the extent needed to protect the legitimate interests of the mandator.
- 626. Obligation to transfer
(1) A mandatary shall hand over anything received or created in connection with performance of the mandate to the mandator, along with anything which the mandatary received and did not use to perform the mandate.
(2) If a mandatary uses money in the mandatary’s own interests despite being required to use the money in the interests of the mandator or to hand over the money to the mandator, the mandatary shall pay interest in an amount provided by law for the time during which the mandatary used the money.
(3) Claims and movables which a mandatary acquires when performing a mandate in the mandatary’s name but on account of the mandator, and claims and movables which the mandator transfers to the mandatary for performance of the mandate are not included in the bankruptcy estate of the mandatary and they cannot be subject to a claim against the mandatary in an enforcement procedure.
- 627. Remuneration of mandatary
(1) In the case where the amount of remuneration payable has not been agreed upon in the authorisation agreement, remuneration shall be paid if it can be reasonably presumed that the mandate would only be performed for remuneration, above all if the mandatary performed the mandate for the purposes of the mandatary’s economic or professional activities.
(2) If the amount of remuneration has not been specified, remuneration which is reasonable under the circumstances shall be paid.
- 628. Procedure for payment of remuneration to mandatary and for reimbursement of expenses and compensation of damages
(1) If the remuneration payable to a mandatary is determined on the basis of certain periods of time, the remuneration shall be paid after each corresponding period. In the case of a mandate where the object is entry into a transaction, it is presumed that remuneration is payable after performance of the mandate.
(2) A mandator shall reimburse the mandatary for any reasonable expenses which the mandatary has incurred in performing the mandate and which the mandatary could have deemed to be necessary in the circumstances, except in the case where the expenses are to be covered from the remuneration of the mandatary. It is presumed that the expenses arising from the performance of a mandate which are usually incurred by the mandatary and the expenses which the mandatary would have incurred even without entering into an authorisation agreement shall be covered from the remuneration of the mandatary.
(3) The mandator shall release the mandatary from obligations to third parties which the mandatary has assumed for performance of the mandate.
(4) Before commencing performance of a mandate, the mandatary has the right to demand that an advance payment be made by the mandator in a reasonable amount for the remuneration payable and expenses to be reimbursed.
(5) A mandator shall compensate for damage which is caused to the mandatary upon performance of a mandate and which arises from the risks usually involved in the performance of such a mandate or from the instructions of the mandator, except in the case where damage is to be covered from the remuneration of the mandatary or if the damage was caused by the mandatary behaving in a manner which, under the circumstances, could not be deemed to be necessary for performance of the mandate.
(6) It is presumed that remuneration paid to a mandatary covers the damage specified in subsection (5) of this section.
- 629. Payment of remuneration in event of expiry of authorisation agreement
(1) If the mandatary is to be remunerated after performance of the mandate or expiry of the term granted for performance of the mandate and if the authorisation agreement expires before the mandate is performed or before the expiry of the term granted for the performance thereof, the mandatary is entitled to receive a reasonable part of the remuneration. In such case, the mandatary is entitled to receive full remuneration only if the agreement was terminated due to circumstances dependent on the mandator and if the payment of remuneration is justified under the circumstances.
(2) Upon determination of the amount of remuneration in the case specified in subsection (1) of this section, anything which has already been performed by the mandatary, the gains created thereby to the mandator and the reason for termination of the agreement shall be taken into consideration among other circumstances. Any amounts which the mandatary would have saved as a result of the termination of the agreement or which the mandatary would have obtained in any other manner or could reasonably have been expected to obtain shall be deducted from the remuneration.
(3) If the mandatary cancels the authorisation agreement before the performance thereof, the mandatary has the right to demand that remuneration be paid to the extent which corresponds to the services already provided and that expenses not covered by the remuneration be reimbursed in so far as the mandator has an interest in the services provided up to that point.
- 630. Ordinary cancellation of authorisation agreement entered into for unspecified term
(1) Both parties have the right to cancel an authorisation agreement entered into for an unspecified term at any time until the mandate is performed.
(2) However, a mandatary has the right to cancel an authorisation agreement entered into for an unspecified term only on condition that the mandator can receive the service or enter into the transaction which is the object of the mandate in another manner. If the mandatary cancels the authorisation agreement without considering the above, the mandatary shall compensate the mandator for any damage caused thereby.
(3) If an authorisation agreement is entered into for the life of one party or for a period longer than five years, the mandatary has the right to cancel the contract once five years have passed from the date of entry into the contract by giving at least six months’ advance notice.
- 631. Extraordinary cancellation of authorisation agreement
Both parties have the right to cancel both an authorisation agreement entered into for a specified term and an authorisation agreement entered into for unspecified term without observing the provisions of § 630 of this Act if it becomes evident that, bearing in mind all the circumstances and the interests of both parties, the party wishing to cancel the agreement cannot be expected to continue performance of the authorisation agreement until expiry of the term for cancellation or the term of the agreement or until the mandate is performed.
- 632. Death or bankruptcy of mandator
(1) It is presumed that an authorisation agreement does not expire upon the death of the mandator.
(2) In the event of the bankruptcy of the mandator, the authorisation agreement shall expire upon the declaration of bankruptcy, except in the case where there is no connection between the authorisation agreement and the bankruptcy estate.
(3) If an authorisation agreement expires upon the death of the mandator or upon the declaration of the mandator as bankrupt, the authorisation agreement is nevertheless deemed to be in force until such time as the mandatary becomes aware or ought to become aware of the death of the mandator or of the declaration of the mandator as bankrupt.
- 633. Death or bankruptcy of mandatary
(1) It is presumed that an authorisation agreement expires upon the death of the mandatary.
(2) In the event of the bankruptcy of the mandatary, the authorisation agreement shall expire upon the declaration of bankruptcy, except in the case where there is no connection between the authorisation agreement and the bankruptcy estate.
- 634. Notification obligation of successors
In the event of the death of a party to an authorisation agreement, the successors of the party shall immediately inform the other party thereof.