Obligations of an Agent
In accepting the contract of agency, the
agent is binds himself to carry out the
agency, and is liable for the damages
which, through his non-performance, the
principal may suffer.
In an event when a person declines an
agency, the agent is bound to observe
the diligence of a good father of a family
in the custody and preservation of goods
forwarded to him by the owner until the
latter should appoint an agent or take
charge of the goods.
If there is a stipulation in the contract
wherein that the agent should advance
the necessary funds, he shall be bound to
do so except when the principal is
insolvent.
Upon the execution of the agency, the
agent shall act within the accordance of
the instructions of the principal.
If the execution of the agency would
result to loss or damage the principal, the
agent shall not carry out the agency.
The agent would be liable damages only
if, there being a conflict between his
interests and those of the principal, he
should prefer his own.
If the agent has permitted to borrow
money, he may himself be the lender at
the current rate of interest. If he has
authorized to lend money at interest,
he cannot borrow it without the consent
of the principal.
Obligations of a Principal
The principal must fulfill with all the
obligations, which the agent may have
contracted within the scope of his
authority. As for any obligation wherein
the agent has exceeded his power, the
principal not bound except when he
approves it expressly or implicitly.
The principal is solidarily liable with the
agent if the principal allowed the agent
to act as though he had full powers,
even when the agent has exceeded his
authority.
The principal must also indemnify the
agent for all the damages, which the
execution of the agency may have
caused the agent, without fault or
negligence on his part.
Until the principal effects the
reimbursement and pays the indemnity,
the agent may retain in pledge the
things, which are the object of the
agency.
Shall be solidarily liable to the agent for
all the consequences of the agency, If
two or more persons have appointed an
agent for a common transaction or
undertaking.
When two persons contract with regard
to the same thing, one of them with the
agent and the other with the principal,
and the two contracts are incompatible
with each other, which of prior date
shall be preferred.
The principal shall be liable in damages
to the third person whose contract
must be rejected, if the agent has acted
in good faith.