AGENCY

DEFINITION

By the 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)

Employment of a person to render service in behalf of another
Excludes: 1. Employer- Employee Relationship (Art. 1700)
2. Master-Servant
3. Employer and Independent Contractor (Art. 1713)

CHARACTERISTIC OF AGENCY:
1.
2.
3.
4.
5.

Consensual
Principal
Nominate
Unilateral
Preparatory

ESSENTIAL ELEMENTS: CORS

1. There must be CONSENT express or implied of the parties to establish
Agency
2. The OBJECT is the execution of a juridical act in relation to third person
3. Agent acts as a REPRESENTATIVE of the Principal and not for himself
4. Agent acts within the SCOPE OF HIS AUTHORITY
FORM:
GR: Generally, there are no formal requirements governing the appointment of
agent.
Exception: When the law requires a specific form.
Ex. Sale of land or interest through an agent (Art. 1874)
PURPOSE:

Extend the personality of the Principal.

PARTIES:
1. PRINCIPAL
2. AGENT
(3.) THIRD PARTY
CAPACITY OF PARTIES:

As to Principal: Any person (Natural or Juridical) capacitated to act in his

own right
As to Agent:
-Does not have to possess full capacity to act in so far as 3rd persons are
concerned but he must not be absolutely incapacitated.
-Must be capacitated in so far as his obligation to the Principal

DELEGATED ACTS:
GR: What a man may do in person, he may do thru another.
Exceptions:
1. Personal Acts
-Right to Vote
-Making of Will
-Statements required to be made under oath
2. Criminal Acts or Acts not allowed by law
KINDS OF AGENTS:
1. Universal agent one employed to do all acts which the principal may personally
do, and which he can lawfully delegate to another the power of doing

2. General agent one employed to transact all business of the principal, or all the
business of a particular kind or in a particular place, do all acts connected with a
particular trade, business or employment
3. Special or particular agent one authorized to do act in one or more specific
transactions or to do one or more specific acts or to act upon a particular occasion.

AGENCY DISTINGUISH FROM OTHER SIMILAR CONTRACTS

AGENCY vs. PARTNERSHIP

AGENCY

1. Acts only for his Principal

PARTNERSHIP
1. Partner acts for his co-partners, the
partnership and as principal for himself

SEVILLA vs. CA:

There is neither joint venture nor partnership between TWSI and Mrs. Sevilla. The
relation of said parties is one of a principal and an agent. It is the essence of this
contract that the agent renders services in representation or on behalf of another

AGENCY vs. SALES

AGENCY (Agency to Sell)

1. Agent receives the goods as goods of

SALES
1. Buyer receives the goods as owner

the principal who retains ownership over

the goods
2. Agent has simply to account for the

2. Buyer has to pay the price

proceeds of the sale he may make on the

principals behalf
3. Agent can return the goods in case he
is unable to sell the same

3. Buyer cannot return the object sold

4. Agent in dealing must act within the

4. Buyer can deal with the thing sold as

scope of authority or instruction of the

he pleases

Principal

CIR vs. Manila Machinery & Supply:

____________________

AGENCY vs. LEASE OF SERVICE

AGENCY

LEASE OF SERVICE

1. Basis is representation

1. Basis is Employment

2. Exercise discretionary power

2. Lessor ordinarily performs only

ministerial functions

3. Relationship can be terminated at will

3. Generally relationship can be

terminated only with the consent of both
parties

NELSON CO vs. LEPANTO:

The management contract was one of contract of lease of services and not a
contract of agency. In both agency and lease of services, one of the parties
binds himself to render some services to the other party. Agency however is
distinguish from lease of work or service in that: The basis of agency is
representation, while in the lease of work or services, the basis is
employment.

AGENCY vs. INDEPENDENT CONTRACTOR

AGENCY

INDEPENDENT CONTRACTOR

1. Agent acts under the scope of 1. Undertakes to accomplish certain

authority or instruction granted by result according to his own methods
principal.

and without being subject to another

persons control

AFRICA vs. CALTEX:

Termination of the contract was a right granted only to Caltex but not to the
operator. These provisions of the contract show that the operator was virtually an
employee of the Caltex, not an independent contractor. Hence Caltex is liable for
damages caused.

AGENCY vs. NEGOTIOPRIUM GESTIO

AGENCY

NEGOTIORIUM GESTIO

1. There is Representation

1. There is Representation

2.Expressly conferred

2. Not only without authority but also

without consent

3. Acts according the expressed will of 3. Acts according to presumed will of the
principal

owner

DELA PENA vs. HIDALGO

The implied agency is founded on the lack of contradiction or opposition
which constitutes simultaneous agreement on the part of the p[resumed
principal to the execution of the contract, while in the management of
anothers business there is no simultaneous consent, either express or
implied, but a fiction or presumption of consent because of the benefit
received.