The Abuse of Authority in the Agency Law: Including Organ Agency and Legal Representative

The doctrine of the abuse of authority in the Korean agency law has been developed by the court cases and the legal literature without legislative ground in the Korean Civil Code. Not surprisingly, proposals to introduce a paragraph for the abuse of authority in the Code have been made during the recent discussion for the revision of the Code. Meanwhile, a good faith third party protection in the abuse of legal representative’s authority and the so-called restriction of the organ agent’s authority shed new light on the issue. In this article, a more comprehensive review on the doctrine has been provided, encompassing not only the agent in the Code but also the general authority of commercial agent or organ agent and the legal representative, and not only German and Japanese law but also French, Austrian, Swiss, and American law. The conclusion is as follows: The doctrine of the abuse of authority should not be limited to the agent’s violation of duty to loyalty. It should be extended to all the violation of the restriction or obligation in the internal relationship between the agent and the principal. The counter-party should have been aware of the agent’s abuse or at least he or she should have been grossly negligent in not noticing it. The voidness for the abuse is not opposable against a good faith third party.