Management of Another’s Affairs without a Mandate (Negotiorum Gestio)
by Nils Jansen
1. Functions of negotiorum gestio; terminology
The civil law institution of negotiorum gestio (gestion d’affaires d’autrui) or management of another’s affairs without a mandate (Geschäftsführung ohne Auftrag) is a specific creation of Roman law; and consequently such an institution has only been recognized in legal systems that can be traced back to that origin. The basic idea supporting this institution includes the assumption that a bilateral quasi-contractual legal relationship between a person (gestor) acting on behalf of a principal (dominus) may come into existence even absent a contractual agreement. Typically this relationship is characterized by a twofold doctrinal function. On the one hand, the negotiorum gestio gives rise to obligations correcting a disturbed distribution of goods; thus, it functionally corresponds to the law of restitution (unjustified enrichment). On the other hand, however, the specific relationship of a negotiorum gestio imposes specific duties and especially duties of care; in this respect it parallels service contracts.
Historically, the institution first concerned the principal’s claims to recover whatever the gestor had acquired in the course of his administration of the principal’s affairs and for damages in case of mismanagement; in addition, the gestor was obliged to render account. Later, the gestor was given a reciprocal claim for expenses incurred and a right to be released from the obligations concluded on behalf of the principal. The questions of remuneration for the gestor and of a claim for damages suffered by him have only been discussed in the context of negotiorum gestio since the early modern period, and especially since the 19th century.
The field of cases and problems that have been discussed in the framework of negotiorum gestio or later derivative institutions, such as the German Geschäftsführung ohne Auftrag or the French gestion d’affaires, is extremely wide. One central group concerns the recourse available after paying another’s debts, on the one hand, and the restitution for services that have been performed without a mandate, on the other. Examples are measures taken to secure a dilapidated house, where the owner was absent, or the taking of legal action without a mandate. Yet, cases discussed in the context of negotiorum gestio also relate to the question whether the possessor of an estate is under a duty of rendering account, the resale of goods which have not been accepted by the first buyer, the purchase without a mandate of a stamp for a collector of stamps, and even the ‘self-sacrifice’ in cases of rescue operations, or a driver trying to avoid hitting a cyclist or a pedestrian. In actual legal practice, most cases concern questions of recourse, examples being a public authority claiming a reward for extinguishing a fire, where doing so was part of its public duties, or the performance of services under a void contract. In such cases, many legal systems apply the negotiorum gestio rather than the law of unjustified enrichment.
The comparative picture is remarkably diverse. The modern common law does not acknowledge such a broad and unstructured institution at all and grants equivalent remedies only in highly specific circumstances. Similarly, the Austrian Allgemeines Bürgerliches Gesetzbuch (ABGB) proceeds from the principle that an intervention into another person’s affairs is normally contrary to the law. Although writers have nevertheless accepted the negotiorum gestio, there is general agreement that it must be kept in narrow confines. In addition, civilian legal systems codifying the negotiorum gestio describe its function and its preconditions in highly divergent ways; and even within those legal systems, most questions concerning the institutions’ functions and range of application are disputed. Thus, the field of application of the German Geschäftsführung ohne Auftrag is extremely wide, and the institution offers rather far-reaching claims, such as damages for personal injury and remuneration. In contrast, claims for remuneration are not acknowledged in Scots and French law, and in Scotland the institution cannot even be used for bringing a claim for damages. Indeed, the rules applied in modern Scots law are basically those of the classical Roman law; hence, the principal may have a claim under this institute not only in cases where the gestor was entitled to act on his behalf but also in cases of an unjustified intervention; the same is true in Germany. In contrast, the prevailing opinion in France has for a long time limited the institution’s field of application to cases of justified interventions. However, the present avant-projet for a reform of the French law of obligations is apparently returning to the classical approach in also embracing cases of illegal intervention under the heading of gestion d’affaires.
In view of all these observations, it would be misleading to speak about a uniform European institution of negotiorum gestio. Rather, there are a number of mutually related, though different institutions in civilian legal systems. All those institutions can be traced back to the Roman negotiorum gestio, but they should not be confounded.
2. General developments
It is impossible to understand the Roman negotiorum gestio fully without seeing it as an expression of highly specific features of Roman public morality on the one hand, and without taking the narrow confines of the Roman law of contracts into account, on the other hand. Originally, the institution was based on social duties among people closely associated with each other or among masters and their clients. Such duties were not binding in law, but they could nevertheless give rise to secondary claims for damages and expenses incurred. Cases where the negotiorum gestio was applied might include help in situations of necessity, but the focus of the institution was always on cases where one person had acted in another person’s financial interests. Core cases include the management of another’s property, the taking of legal action for another man, or the reparation of a dilapidated house. ‘Self-sacrifice’ in cases of rescue operations was not discussed in the context of this institution.
Apart from that, the Romans had used the negotiorum gestio also for granting restitutionary claims for which no other action was available. This restitutionary function of the negotiorum gestio was of particular significance as there was no general action for unjustified enrichment in Roman law. In the ius commune, this function of the negotiorum gestio gained even greater importance because the original rationales of the Roman institution (the peculiar Roman public morality and the comparatively narrow law of contracts) were no longer present and because the complete disgorgement of unjustified enrichments was seen as a basic principle of justice. As a consequence, the negotiorum gestio was transformed into a highly flexible, yet at the same time unstructured, means of restitution. Modern functional parallels are the law of unjustified enrichment or instances of subrogation, as found, for example, in insurance and labour law. The negotiorum gestio was now also used for granting a claim for an enrichment resulting from an unjustified management of another’s affairs; according to an influential opinion, it was even applied in cases where the principal had protested against the intervention. Up until today, many European courts regard the fair distribution of burdens as the core restitutionary function of the negotiorum gestio. If such an approach is taken, a subjective intention of managing another’s affairs or even an altruistic motive is simply irrelevant.
Beginning in the 18th century, the negotiorum gestio underwent a further step of functional transformation; now the understanding of this institution was influenced by an ideal of help in emergency situations. This development had been initiated by natural law ideas, according to which the negotiorum gestio had to be seen as an expression of contract law principles. From such a perspective, the institution was conceived of as a fictitious contract that was based on the gestor’s intention of acting for the principal and a corresponding presumed consent on the principal’s side. The modern economic analysis of European private law has similarly interpreted the negotiorum gestio as a ‘hypothetical contract’ which is acknowledged by the law because of high transaction costs preventing the parties from concluding an efficient contract that would maximize their interests.
Such approaches have always limited the field of application for the negotiorum gestio to measures taken for preventing some harm: for, obviously, nobody needs to tolerate interventions into his own affairs that are not strictly necessary but merely useful. Hence, from the 19th century onwards, altruistic help in emergency situations became the new paradigm of negotiorum gestio also among doctrinal writers. At the same time, the question of remuneration for the gestor was perceived as increasingly urgent. Conversely, the restitutionary function of the negotiorum gestio was increasingly relegated to a secondary position, or even ignored.
Since the end of the 19th century, there has been a further functional transformation of the institute, at least in some legal systems. Thus, today the German Geschäftsführung ohne Auftrag is also applied in cases of self-sacrifice in the course of rescue operations. In this context its primary function is to provide the basis for a claim for damages. As a result, the risks of rescue-operations are assigned to the ‘principal’, ie the primary victim. This is a new principle, which was not connected with the negotiorum gestio before the 20th century.
All in all, the negotiorum gestio proves to be a kind of legal chameleon; today its function consists in closing—alleged—gaps in the fields of unjustified enrichment, contract law or torts. The motives for lawyers to take recourse for such purpose to the negotiorum gestio are easy to see. There is no other institution in the law of obligations which is characterized by such an open texture as the Roman negotiorum gestio, the Besorgen eines Geschäfts für einen anderen ohne Auftrag oder sonstige Berechtigung (§ 677 Bürgerliches Gesetzbuch (BGB)), ‘het zich willens en wetens en op redelijke grond inlaten met de behartiging van eens anders belang’ (Art 6:198 NBW), or the formulation of Art 1372 Code civil: ‘Lorsque volontairement on gère l’affaire d’autrui, soit que le propriétaire connaisse la gestion, soit qu’il l’ignore’.
3. Doctrinal and systematic questions
From the traditional point of view of a legal system recognizing a negotiorum gestio, there are two main groups of doctrinal questions to be answered, namely the institution’s legal consequences and the adequate description of its requirements. It is evident that both questions must be seen as intellectually closely connected.
With regard to the principal’s legal position the central questions have always concerned the claim for damages caused by the gestor and the requirements for such a claim on the one hand, and the claim for the benefits which the gestor had gained by managing the principal’s affairs on the other hand, ie the problem of disgorgement of profits. Secondary questions relate to the gestor’s duties of information and accounting. Finally, it has often been discussed whether the gestor is under an obligation to continue the management of the affairs. All these legal obligations may be seen as an adequate consequence of an intentional intervention into another’s legal sphere; perhaps, even gross negligence on the gestor’s side may suffice for imposing such obligations. In any case, an altruistic motive or a legal justification for the intervention is irrelevant. This is so because the principal needs even more legal protection against selfishly motivated interveners than he does with regard to an altruistically motivated friend. This is the reason why most European legal systems have designed the negotiorum gestio as an asymmetrically structured institution. The requirements of the principal’s claims against the gestor were formulated more broadly than the requirements for the gestor’s counter-claims. Only for these counter-claims is the gestor’s right to intervene seen as relevant.
None the less, during the 20th century the requirements of the principal’s and the gestor’s claims have often been paralleled by German and French writers. Thus, the right of intervention became a requirement also for the principal’s claims against the intervener; at the same time, the negotiorum gestio was conceived of as a legal justification in the context of the law of torts (Lehre von der berechtigten Geschäftsführung ohne Auftrag: doctrine of justified negotiorum gestio). This approach offered a rather simple, perhaps intuitively plausible, doctrinal reconstruction of the negotiorum gestio. It fitted in well with the law of mutual contracts, and it offered a clear distinction of the negotiorum gestio from the law of torts. Nevertheless, it has not been accepted anywhere, the reason being that this approach leads to unacceptable gaps of legal protection in cases of unjustified intervention.
On the gestor’s side, it must be decided whether the traditional claim for reimbursement of expenses incurred should be complemented with a claim for damages and with a remuneration of the services rendered by the gestor; furthermore, it has been asked whether the gestor should be vested with the authority of representing the principal. All these questions are difficult to decide; they have remained controversial until today. With regard to a claim for remuneration, there is on the one hand the basic principle of contract law that contractual claims for performance necessarily presuppose a corresponding consensus; cf Art 9 Dir 97/7 in respect of distance contracts. On the other hand, however, there is the basic moral intuition that some services cannot be accepted without incurring a duty to pay some remuneration; this is especially true for professional help in emergency situations. In the 20th century, this latter consideration was apparently the reason for many European courts to overcome the traditionally gratuitous character of the negotiorum gestio by awarding professional gestors some remuneration. During the last decades, though, French and German judges have become more restrictive again, mainly because the previous generous approach led to unacceptable results in cases of unwanted medical services and in cases of people searching for deceased persons’ heirs without a mandate.
If the gestor were granted a claim for damages with regard to personal injury suffered in the course of emergency help as well, this would amount to a strict liability on the principal’s side for the risks of rescue. In this respect, the common law insists on the basic tort-law principle that liability can only be justified if the primary victim is responsible for his or her dangerous situation and has thus ‘invited’ the rescue. Indeed, it is often the case that the primary victim is to be ‘blamed’ even less for the dangerous rescue operation than the gestor, as the gestor typically acts voluntarily and is usually in a position to estimate the risks of his rescue operation. Thus, if it is regarded as politically desirable to insure rescuers against the risks resulting from their rescue operations, this should not be effected by a private law claim against the victim (or the victim’s heirs), but rather by a public-law solution such as a social-insurance claim. Since the 20th century, this approach has been increasingly accepted by European legislatures.
Likewise, the gestor’s power of representation is a historically young problem in the context of negotiorum gestio, even though a comparable authority for captains of ships has long been good law in the common law tradition. Since the 19th century, however, a similar authority has also been recognized in the context of a justified negotiorum gestio in some legal systems in the French tradition. If the gestor’s acting on the principal’s behalf involves legal transactions (juridical act), such power may indeed be important, especially with respect to unilateral juristic acts such as the termination of a contract on behalf of an absent principal. What is more, where the gestor concludes a contract on behalf of the principal, such authority is necessary for avoiding an unnecessary and unsatisfactory trilateral recourse between the third contract partner, the gestor, and the principal.
The question whether the gestor was justified in acting for the principal is decisive for the gestor’s counter-claims against the principal. Traditionally, this question has been determined according to objective criteria. Thus, civilian lawyers asked whether the gestor had acted usefully (utiliter), reasonably (vernünftig), well (bien), or whether the intervention conformed to the principal’s will and best interest (interesse- und willensgemäß). As far as a reimbursement of expenses and even remuneration for services are concerned, this approach by and large corresponds with parallel restitutionary claims for an unjustified enrichment. Differences exist, however, if the justification is determined according to the gestor’s subjective evaluation of the principal’s interests. According to this view, which has often been defended by proponents of the theory of justified negotiorum gestio, the gestor would be entitled to reimbursements and remuneration if he was not negligent in having made an incorrect evaluation of the principal’s situation. But while such considerations may be plausible in the context of the law of torts, they have never been accepted in the context of negotiorum gestio, and, indeed, they lead to highly implausible results.
In view of all these findings and controversial discussions, the fundamental question concerning the negotiorum gestio must, today, be whether it still makes sense to treat all these different problems and claims within the conceptual framework of a single unifying institution. It had already been an analogous application of the institution which was originally the basis for the gestor’s far-reaching claims for restitution and recourse; and the institution and the basic concepts of negotium utiliter gestum or ‘useful management of another’s affairs’ were even less fittingly designed for claims for remuneration and damages. It is difficult to see why all those functionally and normatively divergent claims should be the consequences of the same set of conditions. Remarkably, however, until the present day this question has not been explicitly discussed. Rather than proceeding from the idea of a single, unifying negotiorum gestio, these individual problems should be discussed more specifically in their relevant legal contexts, ie in the fields of contract law, unjustified enrichment and the law of torts. Such discussion may then help to decide whether the institution still has a place in modern law.
4. Legal unification
Until recently, there have been no harmonization attempts concerning negotiorum gestio on a European (or global) level as there is no practical need for such a development. Likewise, not much comparative work has been done with regard to this institution. None the less, the Study Group on a European Civil Code did include negotiorum gestio in their codification project; in 2006, the Group presented a first set of rules for this institution (Principles of European Law: Benevolent Intervention in Another’s Affairs). However, those Principles are based on the Lehre von der berechtigten Geschäftsführung ohne Auftrag (doctrine of justified negotiorum gestio—see 3. above); paradigmatically they relate to rescue operations. Hence, those rules do not offer a fair comparative picture of the present state of European law; nor are they convincing as a proposal for a future law.
Hans-Hermann Seiler, Der Tatbestand der negotiorum gestioim römischen Recht (1968); Christian Wollschläger, Die Geschäftsführung ohne Auftrag (1976); Samuel J Stoljar, ‘Negotiorum gestio’ in IECL X (1984) ch 17; Hein Kötz, ‘Geschäftsführung ohne Auftrag aus rechtsökonomischer Sicht’ in Festschrift Bernhard Großfeld (1999) 583; Jan Smits, The Good Samaritan in European Private Law (2000); Hanoch Dagan, The Law and Ethics of Restitution (2004) 86–163; Jeroen Kortmann, Altruism in Private Law: Liability for Nonfeasance and Negotiorum Gestio (2005) 81–191; Heike Suderow, Die Geschäftsführung ohne Auftrag: Ein Rechtsvergleich zwischen Deutschland, Frankreich und den Niederlanden (2005); Study Group on a European Civil Code, Christian von Bar, Principles of European Law: Benevolent Intervention in Another’s Affairs (2005); Nils Jansen, ‘Negotiorum Gestio and Benevolent Intervention in Another’s Affairs: Principles of European Law?’ (2007) 15 ZEuP 958; Nils Jansen, ‘§§ 677–687 I. Geschäftsführung ohne Auftrag’ in Mathias Schmoeckel, Joachim Rückert and Reinhard Zimmermann (eds), Historisch-kritischer Kommentar zum BGB, vol III (forthcoming 2012).