Kuwait Court of Cassation principle number 564

Summary: - The principal's exemption of the agent from performing the obligation to render an account of his agency activities. A legal act. It may be implicit, through approval of his acts in all his affairs within the scope of the agency without rendering an account thereof. The effect of this expression of intent continues throughout the agency and after its termination. The agency does not terminate upon the principal's illness, even if severe. The continued effect of the exemption constitutes a presumption of continuity of the existing state, applying the foundational rule that what existed remains as it was. - Loss of capacity by either party to the agency contract, including loss of awareness and discernment when unconscious. One of the grounds for termination of the agency, applying the rule linking capacity to act with awareness and discernment. What is material in this regard is permanent loss of capacity, whereby legal positions become settled, rather than incidental or temporary loss. The basis thereof. The legislature's association of loss of capacity as a ground for termination of agency with the death of either party thereto. Assessment of whether loss of capacity is permanent or incidental such as to require termination of the agency. A question of fact. Rule: It is established in this Court's case law that, pursuant to Article 706 of the Civil Code, the agent's obligation to render an account of his agency activities does not lapse unless the principal clearly and unequivocally exempts him from it, or the nature of the transaction or the circumstances require that exemption. Determining the existence or absence of an agreement on exemption, or the circumstances that required it, is a question of fact exclusively for the court of merits, which may base its judgment on presumptions inferred from the facts of the action. Its assessment of those presumptions and the weight it assigns to them are not subject to review, provided that its inference is reasonable and capable of leading to the conclusion drawn therefrom. Pursuant to Article 36, paragraph 1, of the Civil Code, an expression of intent exists as soon as it is issued by its maker and takes effect when it comes to the knowledge of its addressee. The principal's exemption of the agent from performing the obligation to render an account of his agency activities is a legal act whereby the principal expresses his intent, even implicitly, to exempt the agent and approve his acts in all his affairs within the scope of the agency without rendering an account thereof, treating them as though they had been performed by the principal himself. The effect of this expression of intent continues throughout the agency and after its termination. Legally, the agency does not terminate upon the principal's illness, even if severe. The continued effect of the exemption in this case constitutes a presumption of continuity of the existing state, applying the foundational rule that what existed remains as it was. Although, pursuant to Article 716 of the Civil Code, loss of capacity by either party to the agency contract is a ground for termination of the agency—including loss of awareness and discernment when unconscious, applying the general rules linking capacity to act with awareness and discernment—what is material in this regard is permanent loss of capacity, whereby legal positions become settled in a manner allowing rulings to be based upon them, rather than incidental, temporary loss. This is indicated by the legislature's association of loss of capacity as a ground for termination of agency with the death of either party thereto. Assessment of whether loss of capacity in this case is permanent or incidental, so as to require termination of the agency or not, is a question of fact varying from one situation to another. That being so, the first-instance judgment, upheld and supplemented by the challenged judgment, based its dismissal of the action on the fact that the respondent had carried out the agency activities on behalf of his father, the deceased, for nearly ten years, and had never rendered an account of his agency activities to his father, nor had the latter requested that he do so, because of their relationship, which inspired his trust. Neither the papers nor the appointed expert's report established any negligence or fault on the respondent's part or any outstanding sums owed by him to the principal. The latter judgment added that the deceased's illness occurred in the last period of his life and had no effect on his expression of intent to grant exemption throughout the agency, since that intent remained unchanged under the presumption of continuity of the original state, and that the female appellant had not submitted conclusive evidence that the deceased's illness was permanent during the agency and until his death. It accordingly inferred that the principal had previously exempted him from rendering an account of his agency activities, and consequently dismissed her action, in which the dispute was confined to the respondent's obligation to submit a statement of account of his agency activities on behalf of the aforementioned deceased and the claim for certain sums as a consequence of that agency. These are reasonable grounds falling within the discretion of the court of merits, sufficient to support the judgment and containing an implicit refutation disposing of the contrary defence raised by the female appellant. The criticism on these grounds thus amounts to a factual argument beyond this Court's review and is unfounded.