AGENCY

BY HOPE ANGELIE R. TANGENTE

CONTRACT OF AGENCY
A contract whereby a person binds himself to render some
service or to do something in representation or on behalf of
another, with the consent or authority of the latter

PARTIES TO THE CONTRACT

Principal person represented
Agent person acting in a representative way

NATURE, BASIS, & PURPOSE OF AGENCY

Contract
Requisites: consent, object, cause
Representative relation
The agent renders some service or does something in
representation or on behalf of another
Extend the personality of the principal

ESSENTIAL ELEMENTS
Consent
Object
The agent acts as a representative
The agent acts within the scope of his authority

CHARACTERISTICS
Consensual
Principal
Nominate
Unilateral if it is gratuitous
Bilateral if it is compensation
Preparatory

ACTS THAT MAY BE DELEGATED TO AGENTS

General Rule: What a man may do in person, he may do
thru another
Exceptions: Personal acts
Criminal acts or acts not allowed by law

AGENCY DISTINGUISHED FROM SIMILAR CONTRACTS

AGENCY
Agent may be given funds by the
principal to advance the latters
business
AGENCY
The basis is representation
AGENCY
Subject to the control and direction of
the principal whom he represents
AGENCY
Acts only for his principal

LOAN
Borrower is given money for purpose of
his own and he must generally return it
whether or not his own business is
successful
LEASE OF SERVICE
The basis is employment
INDEPENDENT CONTRACT
The independent contractor exercises
his employment independently
PARTNERSHIP
Acts not only for his co-partners and
the partnership but also as principal of
himself

AGENCY DISTINGUISHED FROM SIMILAR CONTRACTS

AGENCY
Representation is expressly conferred

NEGOTIORIUM GESTIO
Representation is without authority
and knowledge of the owner of the
business
AGENCY
BROKERAGE
A commission agent is one engaged in A broker has no relation with the thing
the purchase or sale for another of
he buys and sells. He is merely an
personal property which, for this
intermediary between the purchaser
purpose is placed in his possession and and the vendor
at his disposal
AGENCY
SALE
Refer to Article 1466 (page 15)

KINDS OF AGENCY
As to manner of its creation:
Express
Implied
As to its character:
Gratuitous
Compensated or Onerous

As to authority conferred:
Couched in general terms
Couched in specific terms
As to its nature and effects:
Ostensible or Representative
Simple or Commission

As to extent of business covered:

General
Special

CLASSIFICATION OF AGENTS
Universal agent
General Agent
Special or Particular Agent

ACCEPTANCE
Express
Implied
Between persons present if the agent receives a power of attorney from
the principal itself without any objection
Between persons absent acceptance by the agent is not implied from his
silence or inaction
Exception:
1. When principal transits his power of attorney to the agent, who
receives it without any objection
2. When the principal entrusts to him by letter of telegram a power of
attorney with respect to the business in which he is habitually engaged as an
agent, and he did not reply to the letter or telegram

WHEN SPECIAL POWER OF ATTORNEY

NECESSARY
1. To make such payment as are not usually considered as
acts of administration
2. To effect novation
3. To compromise, to submit questions for arbitration, to
renounce the right to appeal from a judgement, to waive
objections to the venue of an action, or to abandon a
prescription already prescribed
4. To waive an obligation gratuitously
5. To convey or acquire immovables

WHEN SPECIAL POWER OF ATTORNEY

NECESSARY
6. To make gifts
7. To loan or borrow money
8. To lease realty for more than one year
9. To bind the principal to render service gratuitously
10.To bind the principal in a contract of partnership
11.To obligate the principal as a guarantor or surety
12.To create or convey real rights over immovable property

WHEN SPECIAL POWER OF ATTORNEY

NECESSARY
13.To accept or repudiate an inheritance
14.To ratify or recognize obligations contracted before the
agency
15.Any other act of strict dominion

AUTHORITY OF AN AGENT
The power of the agent to affect legal relations of the
principal by acts done in accordance with the principals
manifestation of consent to him

KINDS OF AUTHORITY
Actual
Express
Implied
Apparent or Ostensible
General
Special
Authority by necessity

KINDS OF PRINCIPAL
Disclosed principal
Partially disclosed principal
Undisclosed principal

OBLIGATIONS OF THE PRINCIPAL

1. To comply with all the obligations which the agent may
have contracted within the scope of his authority and in
the name of the principal
2. To advance to the agent, should the latter so request, the
sums necessary for the execution of the agency
3. To reimburse the agent for all the advances made by him
provided the agent is free from fault

OBLIGATIONS OF THE PRINCIPAL

4. To indemnify the agent for all the damages which the
execution of the agency may have caused the latter
without fault or negligence on his part
5. To pay the agent the compensation agreed upon, or if no
compensation, the reasonable value of the agents
services

OBLIGATIONS OF THE AGENT

1. To carry out the agency in accordance with its terms
2. To answer for damages which through his nonperformance the principal may suffer
3. To finish the business already begun on the death of the
principal, should delay detail any danger
4. To observe the diligence of a good father of a family in
the custody and preservation of the goods forwarded to
him by the owner in case he declines an agency, until an
agent is appointed

OBLIGATIONS OF THE AGENT

5. To advance the necessary funds should there be a
stipulation to that effect
6. To act in accordance with the instructions of the principal
7. Not to carry out the agency if its execution would
manifestly result in loss or damage to the principal
8. To answer for damages should he prefer in case of
conflict, his own interests to those of the principal

OBLIGATIONS OF THE AGENT

9. Not to loan to himself without the consent of the principal
when he has been authorized to lend at interest
10.To render an account of his transactions and to deliver to
the principal whatever he may have received by virtue of
the agency
11.To distinguish by countermarks and designate the
merchandise respectively belonging to the principal, in
the case of a commission agent who handles goods of the
same kind and mark which belong to different owners

OBLIGATIONS OF THE AGENT

12.To be responsible in certain cases for the acts of the
substitute appointed by him
13.To pay interest on funds he has applied to his own use
14.To inform the principal, where an authorized sale of credit
has been made of such sale
15.To bear risk of collection, should he receive also on sale, a
guarantee commission

OBLIGATIONS OF THE AGENT

16.To indemnify the principal for damages for his failure to
collect the credits of his principal at the time that they
become due
17.To answer for his fraud or negligence

MODES OF EXTINGUISHMENT
By Subsequent acts of the parties:
1. By its revocation
2. By the withdrawal of the agent
By operation of law:
3. By the death, civil interdiction, insanity, or insolvency of the principal or of the
agent
4. By the dissolution of the firm or corporation which entrusted or accepted the
agency
By agreement
5. By the accomplishment of the object or purpose of the agency
6. By the expiration of the period of which the agency was constituted