Self-Dealing in Legal Representation (Negotiating with Oneself)

By Sandra Laranjeiro dos Santos and Cristian Martea, Cooperate Legal Services, Lda.

Ana went to work abroad and decided to sell her flat in Alvalade. To facilitate the process, she signed a power of attorney in favour of her friend Pedro, granting him the power to sell the property "for the best possible price". However, Pedro, who happened to be in need of moving house, thought it was an excellent opportunity and decided to buy it for himself: he transferred €100,000 to Ana's account and signed the purchase and sale agreement, simultaneously assuming the role of seller (representing Ana) and buyer (in his own name).

Weeks later, Ana discovered that the market value was €230,000; she felt aggrieved and questioned the validity of the sale: after all, could Pedro have bought the property he himself was tasked with selling? 

The situation of Pedro and Ana perfectly illustrates the risk of a conflict...continued in the PDF...