Mandate Contract in Switzerland: Your Rights & Liability (Art. 394 CO)

The mandate contract (Auftrag, contrat de mandat, contratto di mandato) is one of the most common types of agreement in Switzerland. It governs the relationship between you and your lawyer, accountant, fiduciary, doctor, architect, financial advisor or any professional you hire to perform a task on your behalf. Articles 394 to 406 of the Swiss Code of Obligations (CO) define its scope, rights and obligations.

Definition (art. 394 CO)

Under a mandate, the agent (the professional) undertakes to manage the matter entrusted by the principal (you, the client) or to render the promised services. Crucially, the mandate is an obligation of means, not result: the agent must act with care but does not guarantee success.

This distinction matters in practice. A lawyer who loses your case has not necessarily breached the mandate. A surgeon whose operation does not work as hoped has not automatically breached either. What counts is whether they applied the standard of care expected of a competent professional in their field.

The mandate rules apply subsidiarily to all paid work that is not covered by another specific contract type (art. 394 para. 2 CO). For example, programming work might fall under "work contract" (art. 363 CO) if a specific result is promised, but consulting work is typically a mandate.

When Is It a Mandate vs Another Contract?

| Situation | Likely contract type | |---|---| | Lawyer representing you in court | Mandate | | Plumber installing a pipe | Work contract (art. 363 CO) | | Painter painting a room | Work contract | | Doctor treating a patient | Mandate | | Real estate agent finding a buyer | Brokerage (art. 412 CO) | | Accountant doing your taxes | Mandate | | Architect designing a house | Mixed: mandate + work contract |

The key test: does the professional promise a specific result (work contract) or diligent effort (mandate)?

Agent's Obligations

Duty of Care and Loyalty (art. 398 CO)

The agent must execute the mandate with all required care and safeguard the principal's interests, even if it means warning the principal against their own decisions. The agent is liable for faithful and diligent execution (art. 398 para. 2 CO).

The standard of care depends on the profession: a Swiss lawyer is held to the standard of a reasonably competent member of the cantonal bar; a doctor to the standard of medical science at the time of treatment, etc.

Duty to Account (art. 400 CO)

The agent must account to the principal:

1. On request at any time during the mandate
2. At mandate end, automatically

Accounting includes returning everything received in the exercise of the mandate: documents, files, money, items. A lawyer must hand over your case file when you ask (you don't have to give a reason). Withholding documents to pressure payment of fees is illegal.

Personal Execution (art. 398 para. 3 CO)

The agent must execute the mandate personally. They may sub-delegate only if:

1. The contract authorizes it
2. Circumstances require it (e.g., illness)
3. It is the customary practice of the profession

If they delegate without authorization and the substitute causes damage, the agent is fully liable (art. 399 CO).

Principal's Obligations

The principal must:

1. Pay agreed fees (or customary fees if no amount was set, presumed for professionals — art. 394 para. 3 CO)
2. Reimburse expenses with interest from the date incurred (art. 402 para. 1 CO)
3. Release the agent from obligations undertaken on the principal's behalf
4. Compensate damage caused to the agent by the execution of the mandate, unless proving the agent was at fault (art. 402 para. 2 CO)

Free Revocation (art. 404 CO) — A Critical Rule

This is the most important article of mandate law. Either party may revoke the mandate at any time. This rule is mandatory law per established Federal Supreme Court case law (ATF 115 II 484, ATF 110 II 380): contractual clauses limiting the right to revoke are void.

In practice:

1. You can fire your lawyer, doctor, accountant at any moment, without justification
2. They can refuse to continue at any moment too
3. Notice periods or "cancellation fees" in mandate contracts are unenforceable
4. The only consequence: the revoking party at an "inopportune time" must compensate the other for negative damage caused (art. 404 para. 2 CO) — typically limited to extra costs incurred, not lost profits

This makes the mandate fundamentally different from most contracts where breach triggers full damages.

Practical Example: Firing a Swiss Lawyer

You hired a lawyer for a 6-month case. After 2 months you decide to switch attorneys. You can do this immediately by registered letter. The lawyer must:

1. Stop work immediately
2. Hand over your full case file (originals + copies)
3. Provide a final invoice for work actually done

You owe:

1. Their hourly fees for hours worked up to revocation
2. Reasonable expenses
3. Not the unpaid balance of any "minimum fee", "retainer to be earned" or "early termination fee"

Liability for Damage (art. 398 para. 2 CO)

If the agent causes you damage by breaching their duty, you can claim damages. Required elements:

1. Fault (breach of duty of care)
2. Damage (financial loss)
3. Causal link between fault and damage

The burden of proving absence of fault lies on the agent (art. 97 CO by reference). This shifts the typical burden of proof in your favor: you only need to show the breach and the damage; the professional must show they were not at fault.

Common examples of liability:

1. A lawyer missing a deadline that costs you the case → liable for your forgone outcome
2. A fiduciary giving wrong tax advice that triggers a penalty → liable for the penalty
3. An architect specifying inadequate foundations leading to structural issues → liable

Statute of Limitations

Claims arising from the mandate prescribe in 10 years (art. 127 CO). The clock starts running from the day the right became enforceable. Special shorter periods may apply for some professions (e.g., 5 years for periodic services like rent).

Written or Oral?

The mandate can be concluded orally, by conduct, or in writing. No specific form is required. However, written form is strongly recommended for:

1. Defining the exact scope of work
2. Setting fee structure (hourly rate, flat fee, success fee where allowed)
3. Documenting authority to act
4. Limiting the agent's liability where law permits (note: liability for wilful misconduct or gross negligence cannot be excluded — art. 100 CO)

End of the Mandate (art. 405 CO)

Beyond revocation, the mandate ends:

1. By death of either party (unless the parties agreed otherwise)
2. By incapacity of either party
3. By bankruptcy of either party

For ongoing work that depended on personal trust, this can be problematic. Sophisticated mandates (e.g., to sell real estate, manage assets) often include continuation clauses authorizing heirs.

Choosing the Right Professional

When entering a mandate, especially with significant financial or legal consequences:

1. Verify the professional's registration (cantonal bar for lawyers, FINMA registration for some financial advisors, etc.)
2. Ask for the fee structure in writing before work begins
3. Confirm whether the professional carries professional liability insurance (mandatory for lawyers, doctors)
4. Understand the scope clearly: what is included, what is not, what triggers extra fees
5. Get the agreement in writing for anything beyond a simple consultation