Within contractual relationships governed by civil law, agency contracts are among the most frequently used agreements in daily transactions, due to the trust they involve between the principal and the agent and the reciprocal obligations they impose.
The Qatari legislator has devoted special regulation to this contract within the chapter of nominated contracts in the Civil Code, defining its scope, elements, the limits of the agent’s authority, and the effects of breach of obligations. The underlying principle in this relationship is the existence of civil liability, which is addressed through compensation, termination of the contract, or restitution of the entrusted funds to the principal. The relationship does not shift into the sphere of criminal liability unless the agent exceeds the limits of the agency in a manner involving embezzlement, misappropriation, or use that reveals an intention to unlawfully appropriate or own the funds.
However, difficulty arises when civil law rules intersect with the provisions of the Penal Code, particularly in light of Article (362) of the Penal Code concerning the offence of breach of trust, whereby the legislator included agency contracts among the contracts that may, exceptionally, give rise to criminal liability. This overlap raises the question of the boundary between contractual breach remaining within the civil sphere and conduct that transfers the relationship from civil liability to criminal liability.
The importance of this question increases in view of the tendency in certain disputes arising from agency contracts to resort to criminal proceedings to resolve disputes of contractual origin. This necessitates controlling the scope of criminalization and avoiding expansion of criminal provisions at the expense of the established principles of civil law.
In this context, the jurisprudence of the Qatari Court of Cassation has played a pivotal role in defining this distinction, by establishing the principle that criminal liability does not arise merely from breach of an agency contract, regardless of the gravity of the damage or loss, unless the agent’s conduct involves an actual infringement of the entrusted funds with intent to appropriate or unlawfully possess them, thereby transferring the act from the sphere of civil liability to that of criminal liability.
In this regard, the Court of Cassation emphasized that the offence of breach of trust under Article (362) of the Penal Code is an offence with specific elements and is not established unless it is proven that the funds were delivered to the offender in trust under one of the contracts specified by law, and that the offender thereafter committed embezzlement, misappropriation, or use revealing an intention to appropriate the funds for his own benefit. Mere exceeding the limits of agency, failure to exercise due care in performance, or causing loss to the principal is not in itself sufficient to establish the material element of the offence of breach of trust.
The Court of Cassation settled in its judgment in Appeal No. 333 of 2013, session dated 3 March 2014, that the acts attributed to the appellant — assuming they were established — did not involve appropriation of funds delivered in trust, but were limited to exceeding the limits of the agency. Accordingly, the material element of the offence of breach of trust in its various forms was absent, and the relationship between the parties remained a civil relationship. This judgment reflects the distinction between contractual fault and criminal conduct, preventing expansion of criminalization and in line with the established principles of criminal law.
In this context, loss does not constitute a basis for the offence of breach of trust, even if it reaches a serious level. Criminal law does not intervene merely because of failure in managing the entrusted funds or error in judgment, so long as the funds remain allocated to the purpose for which they were delivered and the conduct is not accompanied by intent to appropriate or embezzle them. This distinction is fundamental between loss occurring within a contractual relationship and misappropriation, which presupposes conduct contrary to the nature of trust in the funds and is based on denial of the principal’s right thereto, severing the agent’s connection with the funds as property belonging to another.
Conversely, the Qatari Court of Cassation confirmed in another judgment in Appeal No. 316 of 2013, session dated 3 March 2014, that criminal liability arises when it is established that the agent received the funds under the agency, then retained them, disposed of them for his own benefit, or refused to return them without lawful justification, which constitutes appropriation of the entrusted funds. This judgment shows that the decisive factor is not the form or description of the relationship, but the reality of the material conduct committed in respect of the funds.
Accordingly, exceeding the scope of agency does not constitute a crime in itself. It becomes so only when accompanied by actual appropriation of the funds or a change in their legal character from entrusted property to property owned by the offender. Thus, the dividing line between civil and criminal liability is the existence of an infringement of the funds, not merely the occurrence of loss or damage.
This judicial approach reflects a precise balance between protecting individuals’ financial rights and preventing misuse of criminalization in civil disputes, thereby achieving transactional stability and preserving the special nature of criminal law as an exceptional branch that does not extend beyond the scope of genuine criminalization.