The mandate agreement is one of the most common contract types in Swiss professional and economic life. It governs the relationship between a client (the principal) and an intellectual services provider (the mandatary) — lawyer, doctor, architect, financial adviser, trustee — and rests on a special relationship of trust. Governed by arts. 394 to 406 CO, the mandate is fundamentally distinguished from the construction services contract by the absence of an obligation of result. PBM Avocats in Geneva and Lausanne intervenes in the negotiation, drafting and disputes involving complex mandates.
Definition and Essential Characteristics (art. 394 CO)
The mandate is characterised by:
- No obligation of result: the mandatary undertakes to act diligently, not to achieve a specific result (unlike a contractor)
- Independence: the mandatary is not subordinate to the principal and organises their work freely
- Personal character (intuitu personae): the mandate is based on a personal relationship of trust; the mandatary must in principle perform personally
- Gratuitous or remunerated: the mandate is gratuitous unless remuneration is expressly or tacitly provided for
- Free revocability: both parties may terminate the mandate at any time (art. 404 CO), subject to indemnification if at an inopportune time
Mandate vs Construction Services Contract: Key Distinctions
| Criterion | Mandate (art. 394 CO) | Construction Services (art. 363 CO) |
|---|---|---|
| Nature of obligation | Best efforts (means obligation) | Obligation of result |
| Revocability | At any time (art. 404 CO) | By client at any time with compensation (art. 377 CO) |
| Defect warranty | No specific warranty | Specific legal warranty (arts. 367-371 CO) |
| Remuneration | Payable even without result | Subject to delivery of compliant work |
| Sub-contract | In principle prohibited without authorisation | Generally permitted unless excluded |
The Mandatary's Duties (arts. 398-400 CO)
- Duty of diligence: perform the mandate with the care expected of a professional of the same type
- Duty of loyalty: act exclusively in the interest of the principal, avoid conflicts of interest
- Duty to render account: provide regular information on the progress of the mandate
- Duty to return: return to the principal everything received in connection with the mandate (including commissions from third parties — art. 400 CO)
- Duty to act personally: perform the mandate personally unless otherwise authorised
Free Revocability and Inopportune Termination (art. 404 CO)
The free revocability of the mandate is a rule of public policy that cannot be contractually excluded. However, if the revocation occurs at an inopportune time — i.e., at a time when its consequences are particularly burdensome for the other party — the terminating party must compensate for the damage thus caused.
An inopportune time is assessed objectively: a mandate revoked the day before an important proceeding, or a resignation by the mandatary in the middle of a complex project without sufficient notice, may give rise to damages.
What is the difference between a mandate and an employment contract?
The mandate (arts. 394 et seq. CO) is a contract by which the mandatary undertakes to carry out a task entrusted to them, with no obligation of result (unlike the construction services contract). The mandatary works independently, without subordination to the principal. The employment contract (art. 319 CO) creates a subordination relationship: the employee follows the employer's instructions and is integrated into the organisation. The distinction is decisive for social insurance, notice periods and dismissal protection.
Can the mandate be revoked at any time?
Yes. Art. 404 CO allows both parties to terminate the mandate at any time. However, if the mandate is revoked at an inopportune time (without reasonable justification), the terminating party must compensate the other for the damage suffered. This rule is mandatory and cannot be excluded contractually. It applies regardless of whether the mandate is for a fixed or indefinite term.
Is the mandatary obliged to perform the mandate personally?
In principle yes, because the mandate is based on a relationship of personal trust (intuitu personae). Art. 398 CO requires the mandatary to perform the mandate personally, unless sub-mandate is authorised by the principal or required by circumstances. If the mandatary entrusts the task to a third party without authorisation, they are liable for the third party's acts as if they were their own.
What is the mandatary's duty of loyalty (art. 398 CO)?
Art. 398 CO imposes on the mandatary an obligation of diligence and loyalty: they must manage the entrusted affairs in good faith, in the exclusive interest of the principal, and avoid conflicts of interest. This includes the obligation to return to the principal everything received in connection with the mandate (including any commission from third parties, which must be disclosed under art. 400 CO).