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ARTICLE 1868
Contract of agency include all situations in which one
person is employed to render service for another,
excludes, however, from its concept the relationship of
employer and employee, of master and servant, and of
employer and independent contractor
Agency is a fiduciary relationship which implies a power
in an agent to contract with a third person on behalf of a
principal.
It is this power to effect the principals contractual
relations with third persons that differentiates the agent
from the employee, the servant, and the independent
contractor.
Agency relates to commercial or business transactions.
Agency relationship may also arise in non-business
situations, example, a person returns an article to a
lender for a borrower friend
All agencies are governed by the Civil Code
Term used in other senses
Agency is sometimes used in a sense other than to
denote the relationship of principal and agent
1. Place at which the business is transacted
The relationship of the principal and agent is not
necessarily implied
2. Used in the sense of instrumentality by which a thing
is done
3. Exclusive right of a person to sell a product of
another in a specific territory
Characteristics of a contract of agency
1. Consensual it is based on the agreement of the
parties, which is perfected by mere consent
2. Principal it can stand by itself without need of
another contract
3. Nominate it has its own name
4. Unilateral if it is gratuitous because it creates
obligations for only one of the parties, i.e., the agent
Bilateral if it is for compensation because it gives
rise to reciprocal rights and obligations
5. Preparatory it is entered into as a means to an
end, i.e., the creation of other transactions or
contracts