AGENCY

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 I
Concept, Kinds,
Characteristics, Agency
distinguished from other
contracts
[1868-1883]
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Art. 1868. 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.
(1709a)

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Agency, defined. 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.

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Art. 1317. No one may contract in the name of another
without being authorized by the latter, or unless he has
by law a right to represent him.

A contract entered into in the name of another by one

who has no authority or legal representation, or who has
acted beyond his powers, shall be unenforceable, unless
it is ratified, expressly or impliedly, by the person on
whose behalf it has been executed, before it is revoked
by the other contracting party.

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Other terms of agency

Contract of representation pursuant to the

doctrine of representation, by virtue of which
the actual or legal absence of the principal is
converted into his legal or juridical presence.

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Elements of the contract of agency

Basic elements:
1. Consent
2. Object or subject matter
3. Cause or consideration

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Elements specific to agency
1. consent, express or implied, of the parties to establish the
relationship
2. object, which is the execution of a juridical act in relation to
third parties
3. agent acts as a representative and not for himself
(performance stage)
4. agent acts within the scope of his authority (performance
stage)

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Parties to a contract of agency:

1. principal: the person represented (mandante)

2. agent: the person who acts for and in
representation of another (mandatario);
3. attorney-in-fact, proxy, delegate or
representative
4. substitute: agent may have his own agent
known as substitute agent
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CONSENT

1. express: actual intention to appoint or create agency

2. implied: intention naturally inferable from words or

actions

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Characteristics:

1. Consensual
2. Principal
3. Nominate
4. Unilateral – if gratuitous / Bilateral – if for
compensation.
5. Preparatory: entered into by the parties in
preparation for another contract
6. Agency is presumed to be for a
compensation, unless there is proof to the
contrary. (1875)

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Purpose of agency: extend the personality of the
principal through the facility of the agent

Nature of agency: personal, representative and

derivative in nature, Qui facit per alium facit se: he
who acts through another acts himself

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 Agency Sale
Principal retains ownership and control If parties intended that the delivery of
over the property and agent merely the property will effect a
acts on the principal’s behalf and relinquishment of title, control and
under his instructions in furtherance of ownership in such a way that the
the objectives for which the agency recipient may do with the property as
was established he pleases

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 Agency Lease of Services
Basis is representation Basis is employment
Agent represents his principal Lessor of services not represent his
employer
Agency is preparatory contract Contemplates only material non-
juridical acts

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 Kinds of agency in general

1. Gratuitous vs. compensated or

onerous

Art. 1875. Agency is presumed to be for

a compensation, unless there is proof
to the contrary. (n)

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Extent of business covered
1. General – comprise all the business
2. Special – comprise one or more
specific transactions

Art. 1876. An agency is either general

or special.
The former comprises all the business
of the principal. The latter, one or
more specific transactions. (1712)

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Authority conferred

1. Couched in general terms: GENERAL POWER OF ATTORNEY –

created in general term and comprised only act of administration,
comprises acts of administration even if the principal states:
That he withholds no power

Agent may execute such acts as he may consider appropriate

Even though the agency should authorize a general and unlimited
management

2. Couched in specific terms: SPECIAL POWER OF ATTORNEY – acts

of strict dominion or ownership

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Art. 1878. Special powers of attorney are necessary in the following cases:
(1) To make such payments as are not usually considered as acts of
administration;
(2) To effect novations which put an end to obligations already in existence at the
time the agency was constituted;
(3) 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;
(4) To waive any obligation gratuitously;
(5) To enter into any contract by which the ownership of an immovable is
transmitted or acquired either gratuitously or for a valuable consideration;
(6) To make gifts, except customary ones for charity or those made to employees
in the business managed by the agent;
(7) To loan or borrow money, unless the latter act be urgent and indispensable
for the preservation of the things which are under administration;
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(8) To lease any real property to another person for
more than one year;
(9) To bind the principal to render some service
without compensation;
(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;
(13) To accept or repudiate an inheritance;
(14) To ratify or recognize obligations contracted
before the agency;
(15) Any other act of strict dominion. (n)

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15. Any other act of strict dominion…

Art. 1874. 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.

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Kinds of agency as to manner of creation

Art. 1869. Agency may be express, or implied from the acts of

the principal, from his silence or lack of action, or his failure to
repudiate the agency, knowing that another person is acting on
his behalf without authority.
Agency may be oral, unless the law requires a specific form.

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1. express: agent has been authorized by the principal orally or in
writing
2. implied: implied from:
a. acts of principal
b. principal’s silence
c. principal’s lack of action
d. principal’s failure to repudiate the agency
3. agency by estoppel: one who clothes another with apparent
authority as his agent, and holds him out to the public as such,
cannot be permitted to deny the authority of such person to act as his
agent, to the prejudice of innocent third parties dealing with such
person in good faith, and in the honest belief that he is what he
appears to be
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 Kinds of acceptance of agency
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Art. 1870. 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. (n)
Art. 1871. Between persons who are present, the acceptance
of the agency may also be implied if the principal delivers his
power of attorney to the agent and the latter receives it without
any objection. (n)
Art. 1872. Between persons who are absent, the acceptance of
the agency cannot be implied from the silence of the agent,
except:
(1) When the principal transmits his power of attorney to the
agent, who receives it without any objection;
(2) 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.
GR:
express: agent accepts the agency orally and in writing
implied: implied from
a. acts of the agent which carry out the agency
b. agent’s silence
c. agent’s lack of inaction
Between persons who are present (face to face): 1871
principal delivers his power of attorney to the agent;
agent receives it without any objection

Between persons who are absent:

1. when principal transmits his power of attorney to the agent,
who receives it without any objection
2. when 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
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Kinds of agency as to formalities required
(SEE kinds of agency as to authority conferred)

1. General Power of Attorney [1877]

2. Special Power of Attorney [1878]
3. Sale of a piece of land

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 NOTHING
FOLLOWS.

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