Contract Of Agency 523p

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CONTRACT OF AGENCY –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. (Art. 1868) AGENCY – relationship which implies a power in an agent to contract with a third person on behalf of a principal. CHARACTERISTICS OF A CONTRACT OF AGENCY  Consensual -- perfected by mere consent  Principal – can stand by itself without the need of another contract  Nominate – it has its own name  Unilateral if it is gratuitous because it creates obligations for only one of the parties, or bilateral if it is for compensation because it gives rise to reciprocal rights and obligations  Preparatory – it is entered into as a means to an end ESSENTIAL ELEMENTS OF AGENCY  There is consent, express or implied, of the parties to establish relationship.  The object is execution of juridical act in relation to third persons.

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 The agent acts as representative and not for himself.  The agent acts within the scope of his authority. The relationship of an agent to his principal is fiduciary in character since it is based on trust and confidence. PARTIES OF THE CONTRACT  Principal – one whom the agent represents and from whom he derives his authority (any person who is capacitated to act in his own right may be a principal)  Agent – one who acts for and represents another (persons who are absolutely incapacitated, such as insane person cannot be agents; he must be competent to bind himself) ACTS THAT CANNOT BE DONE THRU AN AGENT  Personal acts – if personal performance is required by law or public policy or the agreement of the parties, the doing of the act by a person on behalf of another does not constitute performance of the latter.  Criminal acts or acts not allowed by law – an attempt to delegate to another authority to do an act which, if done by the principal would be illegal, is VOID.

AGENCY DISTINGUISHED FROM SIMMILAR CONTRACTS  

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Agency

Loan borro wer is given mone y for purpo ses of his own and he must gener ally return it agent may be given fund to advan ce the princi pal's busin ess

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Lease of Servic e

the basis is employ ment

the basis is repres entatio n

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Independent Contract

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Partners hip

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copartners acts not only for his copartners and the partners hip but also as principal of himself

the independent contractor exercises his employment independently

agent is subject to the control and direction of the principal whom he represents

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agent acts for his principal

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Negotiorium gestio

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not only without the authority of the owner of the business but is without his knowledge; quasi-contract

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representation is expressly conferred; contract

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Broker age

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broker has no relatio n with the thing he buys or sells

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commi ssion agent is one engag ed in the purcha se or sale for anothe r

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KINDS OF AGENCY  As to manner of its creation × Express – agent has been actually authorized by the principal either orally or in writing × Implied – implied from the acts of the principal, from his silence or lack of action, or his failure to repudiate the agency  As to its character × Gratuitous – agent receives no compensation for his services × Compensated or Onerous – agent receives compensation for his services  As to extent of business covered × General – comprises all the business of the principal × Special – comprises one or more specific transactions  As to authority conferred × Couched in general – created in general and is deemed to comprise only acts of istration. × Couched in specific – authorizing only the performance of a specific act or acts.  As to its nature and effects × Ostensible or representative – agent acts in the name and the representation of the principal × Simple or commission – agent acts for the of the principal but in his own name. Acceptance by the agent may also be express or implied from his acts which carry out the agency, or from his silence or inaction according to the circumstances. (Art. 1870) The agency is impliedly accepted if the agent receives a power of attorney from the principal himself personally without any objection, both being present. Power of Attorney – written authorization to an agent to perform specified acts in behalf of his principal which acts, when performed, shall have binding effect on the principal. If both the principal and the agent are absent, acceptance by the agent is not implied from his silence or inaction except when the principal transmits his power of attorney to the agent, who receives it without any objection, or when the principal entrusts to him by letter or 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. TWO WAYS OF GIVING NOTICE OF AGENCY WITH DIFFERENT EFFECTS  If by special information, the person pointed as agent is considered such with respect to the person to whom it was given.  If by public ment, the agent is considered as such with regard to any person. The power of attorney must be revoked in the same manner in which it was given.

Agency

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When a sale of a piece of land or any interest therein is through an agent, the authority of the latter shall be in writing; otherwise, the sale shall be void. (Art. 1874) Agency is presumed to be for a compensation, unless there is a proof to the contrary. (Art. 1875) CLASSIFICATION OF AGENTS  Universal agent – authorized to do all acts that the principal may personally do, and which he can delegate to another the power of doing.  General agent – authorized to transact all business of his principal, to do all acts connected with a particular trade, business or employment.  Special or particular agent – authorized to act in one or more specific transactions or to act upon a particular occasion. An agency couched in general may be a general agency or special agency. WHEN SPECIAL POWERS OF ATTORNEY ARE NECESSARY (Art. 1878)  To make payment. (Payment is the delivery of money or the performance in any other manner of an obligation)  To effect novations which put an end to obligations already in existence at the time the agency is constituted.  To compromise, to submit questions to arbitration, to renounce the right to appeal from a judgment, to waive objections to the venue of an action or to abandon a prescription already acquired.  To waive an obligation gratuitously.  To convey or acquire immovable.  To make gifts.  To loan or borrow money.  To lease realty to another for more than one year.  To bind the principal to render service gratuitously.  To bind the principal in a contract of partnership.  To obligate the principal as a guarantor or surety.  To create or convey real rights over immovable property belonging to his principal.  To accept or repudiate inheritance.  To ratify obligations contracted before the agency.  Any other act of strict dominion. A special power to sell excludes the power to mortgage; and a special power to mortgage excludes the power to sell (Art. 1879) A special power to compromise does not authorize submission to arbitration (Art. 1880) Authority of an agent – power of the agent to affect the legal relations of the principals by acts done in accordance with the principal’s manifestation of consent to him. KINDS OF AUTHORITY  Actual – actually granted and it may be express or implied  Express – conferred by words  Implied – incidental to the transaction or reasonably necessary to accomplish the purpose of the agency

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Apparent or ostensible – conferred by conduct or even by silence.  General – refers to all the business of the principal  Special – limited to only one or more specific transactions  Authority by necessity – demanded by the virtue of the existence of emergency. WHEN PRINCIPAL BOUND BY ACT OF AGENT  Requisites × The agent must act within the scope of his authority. × The agent must act in behalf of the principal.  Ratification by the principal × If the agent acts without authority or in excess or beyond the scope of his authority, such shall be unenforceable, unless it is ratified by the person on whose behalf it has been executed, before it is revoked by the other contracting party. The limits of the agent’s authority shall not be considered exceeded should it have been performed in a manner more advantageous to the principal than that specified by him. (Art. 1882) WHEN PRINCIPAL BOUND BY ACTS OF AGENT BEYOND HIS POWERS  When principal’s acts have contributed to deceive a third person in good faith.

Agency

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When the limitations upon the power created by him could not have been known by the third person.  When the principal has placed in the hands of the agent instruments signed by him in blank.  When the principal has ratified the acts of the agent. KINDS OF PRINCIPAL  Disclosed principal – other party has notice that the agent is acting for principal and of the principal’s identity.  Partially disclosed principal – other party has notice that the agent is or may be acting for a principal but has no notice of the principal’s identity.  Undisclosed principal – other party has no notice that the agent is acting for a principal. If an agent acts in his own name, he is the one directly liable to the person with whom he had contracted as if the transaction were his own. If an agent acts in his own name and involves the things belonging to the principal, the principal is bound by the act of agent as if the contract is

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