The Mandate Agreement: Legally Regulated, Flexibly Structured
The mandate agreement is a legally regulated type of contract in Switzerland, commonly used in the service sector. Whether with lawyers, trustees, doctors, or other consultants – wherever services are provided based on trust and expertise, the mandate agreement serves as the foundation.
Unlike a contract for work, a mandate does not require the agent (the service provider) to achieve a specific result but rather to diligently perform the assigned task. But what does such a contract look like in practice? How can it be terminated? What applies regarding expenses, deadlines, or withdrawal? This article provides a comprehensive overview.
What is a Mandate Agreement?
A mandate agreement is a contract between two parties: the principal and the agent. The legal basis is found in Articles 394 et seq. of the Swiss Code of Obligations (CO). The agent undertakes to perform the assigned tasks in the interest of the principal – for compensation, unless otherwise agreed.
Key features of a mandate agreement:
- Due diligence obligation: The agent must act with due care but is not required to deliver a specific result.
- High flexibility: The contract can be concluded for a fixed term or a one-off project.
- Right to termination at any time – although certain conditions must be met.
Examples of Application
Mandate agreements are common across various sectors. For example:
- A lawyer is retained to conduct a legal analysis.
- A trustee manages the accounting for an SME.
- A business consultant provides strategic support for a project.
- A doctor treats a patient on a mandate basis.
In all these cases, the relationship between the parties is based on trust, expertise, and a contract tailored to the specific situation.
Content and Structure of a Mandate Agreement
A sample mandate agreement should include the following elements:
- Identification of the parties: Who is the principal, and who is the agent?
- Description of services: What specific tasks is the agent assigned to perform?
- Compensation: How will the agent be remunerated – flat fee or hourly rate?
- Expenses: Which costs are included in the fee, and which are not?
- Contract duration: Is the mandate limited or unlimited in time?
- Termination and withdrawal: How can the contract be terminated or ended?
- Confidentiality: Especially important when dealing with sensitive data.
- Written agreement: Although a mandate agreement can be concluded informally, a written contract is strongly recommended.
Rights and Obligations of the Contracting Parties
A mandate agreement obliges both parties to act with care and transparency.
The Agent (Mandatary):
- Must perform the assigned tasks with due care.
- Is bound by duties of loyalty and accountability.
- Is entitled to the agreed compensation in a paid mandate.
The Principal (Mandator):
- Must pay the agreed fee and reimburse any incurred expenses (expense reimbursement).
- May terminate the mandate at any time but may be liable for damages in certain cases.
- Is obliged to cooperate, e.g., by providing necessary information.
Termination and Conclusion of the Mandate
A mandate relationship can, in principle, be terminated at any time – by either party. This mandatory rule under Art. 404 of the Swiss Code of Obligations (CO) is legally established due to the trust-based nature of the mandate.
However, termination at an “inopportune time” – for example, in the middle of ongoing court proceedings – may trigger liability for damages.
The mandate ends automatically upon fulfillment of the task or through termination. A mutual termination of the mandate agreement is also possible at any time. Termination or dissolution should be done in writing to avoid difficulties proving it.
Distinction from Other Contracts
In practice, the mandate agreement is often confused with employment or work contracts. However, there are clear distinctions:
- An employment contract involves a subordinate relationship and an ongoing service relationship.
- A work contract obliges the contractor to deliver a specific result (e.g., a report or a software program).
- A mandate requires only the diligent performance of a task – not a guaranteed outcome.
Understanding these distinctions is important, as they directly impact liability, compensation, and termination conditions.
Conclusion: Flexibility Requires Clear Rules
The mandate agreement is a legally regulated but highly flexible tool for providing services based on trust. It is ideal for situations where no specific result is owed, but rather a qualified effort – such as in advisory mandates or legal representation.
To avoid disputes during the course of the mandate, all key points should be clearly agreed upon in writing. Template agreements can help structure the contract but do not replace individualized legal advice – especially for mandates with significant scope or economic impact.
Anyone – whether client or agent – who values legal certainty and clarity should rely on a professionally drafted mandate agreement. This ensures clear rules regarding compensation, termination, cancellation and task allocation, fostering a cooperative and legally compliant working relationship.
