NATURE

OBJECTIVES
& KINDS OF
AGENCIES
GROUP 4
 ESSENTIAL CHARACTERISTICS OF
AGENCY

1 2 3
Nominate and Principal Consensual Unilateral & Primarily
Onerous
Nominate- it has been set apart by law and
It is based on the agreement of the Unilateral - if it is gratuitous, it
has its own distinctive name and rules parties which is perfected by mere creates obligations for
consent. only one of the parties who is the
Principal - it can stand by itself without agent
the need of another contract; it does not
depend on another contract for its existence
An agency may be expressed or Onerous - the agent expects
and validity. implied from the act of the compensation for his
principal, from his silence or lack of services in the form of a
Whatever the parties name the contractual relationship
action, or failure to repudiate the commission.
when it has the elements of the contract of agency, then it
would be governed by the law on agency. (Doles vs
Angeles)
agency. Litonjua, Jr. v. Eternit Absent stipulation as to liberality,
Corp., 490 SCRA 204 (2006) contract is essentially onerous.
 ESSENTIAL CHARACTERISTICS
OF AGENCY

4 5
Personal, Representative &
Derivative
QUI FACIT PER ALIM FACIT PER SE
He who acts through another acts himself
Representative - the agent acts
as a representative in
behalf of the principal
Derivative – the agent derives
his authority from the
principal
It is the characteristic of representation that
is the most distinguishing mark of agency
when compared to other contracts.
Fiduciary &
Revocable
Fiduciary – the agency relations is
based on trust and confidence
between the agent and the principal
Revocable – the contract of agency
may be revoked at will either by
the principal or the agent subject to
the conditions imposed by law
6
Preparatory &
Progressive
It is entered into as a means to an
end , i.e, the creation of other
transactions and contracts.
Merely a medium or tool resorted
to achieve a gretaer objective of
being able to enter into juridical
relations on behalf of the principal
 Principles flowing from Agency Characterisitics of
“Personal, Representative, and Derivative”

1 2
Contract entered into with
third persons pertain to the
principal and not the agent,
who is a stranger to the said
contract, although he
physically was the one who
entered into it in a
representative capacity
Generally, all acts that the
principal can do in person, he
may do through an agent,
except under public policy are
strictly personal to the person
of the principal
3
A suit against an agent in his
personal capacity cannot,
without compelling reasons, be
considered as suit against the
principal.
 Principles flowing from Agency Characterisitics of
“Personal, Representative, and Derivative”

4 5
Notice to the agent should
always be construed as notice
binding on the principal, even
when in fact the principal
never became aware therof
GR: Knowledge of the agent is
equivalent to knowledge of the
principal.
EXCPN:
1. Agent’s interests are advers to those of
the principal;
2. Agent’s duty is not to disclose the
information, as where he is informed by
way of confidential information; and
3. The person claiming the benefit of the
rule colludes with the agent to defraud the
principal
Kinds of Agency
 1. Based on the business or
transaction covered:
Article 1876. An agency is either general
or special.
General Agency Special Agency

Comprises all the Covers one or more

business of the
principal. specific transactions.
 Classes and Kinds of Agents

1 2 3
A. Universal Agent B. General Agent C. Special/Particular
Agent
Employed to do all acts Employed to transact all
the business of his Authorized to act in one
that the principal may principal, or do all acts or more specific
personally do, and connected with a transactions
which he can lawfully particular trade,
delegate to another the business or
power of doing. employment.
 General Agent VS Special Agent
As to:
Scope of Authority
Extent by which agent may bind
principal
Termination of Authority
Construction of Instructions of
Principal
General Agent Special Agent
Usually authorized to do all acts Authorized to do only acts in
connected with the business or pursuance of particular
employment in which he is instructions or with restrictions
engaged. necessarily implied from the acts
to be done
Binds his principal by an act Cannot bind his principal in a
within the scope of his authority manner beyond or outside the
although it may be contrary to his specific acts which he is
special instructions authorized to perform on behalf
of the principal.
Apparent authority does not Mere revocation is effective to
terminate by the mere revocation terminate the authority as to
of his authority without notice to third persons because the third
the third party person has a duty to inquire
Statement of principal with Authority of agent must be
respect to the agent’s authority strictly pursued
would ordinarily regarded as
advisory only
2. Whether or not it covers litigation
matters
ATTORNEY-AT-LAW

ATTORNEY-IN-FACT
 3. Whether it covers acts of
administration or acts of ownership

General Power of Special Power of

Attorney Attorney

General Power of An instrument in writing by which

Attorney grants broad one person, as principal, appoints
authority to the agent to another as his agent and confers
act on behalf of the
principal in various upon him the authority to perform
matters. certain specified acts or kinds of
acts on behalf of the principal.
Agency Distinguished
from Similar Contracts
Agency Distinguished
From an Employment Contract
Contract of Agency Contract of Employment

Its purpose is the rendition of service to Its purpose is the rendition of services for
effect juridical relationship with a third the benefit of the employer or his business
person

The relationship between the principal and The relationship between capital and labor is
the agent is contractual in nature not merely contractual but impressed with
public interest
Agency Distinguished
From a Contract of a Piece-of-work
Agency
Agent is subject to control and direction of
the principal.
In general, the principal or employer is liable for
the acts of the agent or servant within the scope of
his authority or employment applying the doctrine
of vicarious liability.
Both contracts involve service.
Contract of a Piece-of-work
The independent contractor is authorized to do the
work according to his own method, without being
subject to the other party's control, except insofar as
the RESULT of the work is concerned.
Generally, the employer is not liable for the torts or injury
inflicted by the independent contractor or by the employees
of such contractor.
Employer is liable only if injury is caused by his negligence
or the result of his interference in the work of the
independent contractor or the work is intrinsically dangerous
or a
nuisance.
Agency Distinguished
From a Management agreement
Agency Management Agreement

Basis is representation Basis is employment

The agent exercises discretionary powers. The agent is destined The lessor (like a servant) ordinarily performs only ministerial
to execute juridical acts (creation, modification or extinction of functions. Lease of services contemplate only material (non-
relations with third parties). juridical) acts

Three persons are involved: the principal, the agent, and the Only two persons are involved: the lessor (master or
third person with whom the agent has contracted. employer) and the lessee

Lease of service relates more to matters of mere manual or

Agency relates to commercial or business transactions. mechanical execution, which the
servant acts under the direction and control of the master.

In both agency and lease of services one of the parties binds himself to render
some service to the other party
Agency Distinguished
From a Contract of Sale
Agency to Sell Contract of Sale

Agent receives the goods or property as the goods of the The buyer receives the good as owner
principal

The agent delivers the proceeds of the sale. The buyer pays the price

The agent can return the object in case he is unable to sell it to a As a general rule, the buyer cannot return the object sold
third person

The agent, in dealing with the thing received, is bound to act The buyer can deal with the thing as he pleases, being the
according to the instructions of his principal owner
Agency Distinguished
From a Negotiorum Gestio
Contract of Agency Negotiorum Gestio

Representation is expressly conferred. Not only without the authority of the owner of the
business but is without his knowledge.

Acts according to the express will of the principal Acts according to the presumed will of the owner
by exercising "all the diligence of a good father of a
family"

Contract Quasi-contract

In both cases, the officious manager/negotiorum gestor or agent represents the owner of the
business or principal
Agency Distinguished
From a Contract of Brokerage
Contract of Agency Contract of Brokerage

A commission agent is one engaged in the purchase or sale for

another of personal property which for this purpose, is placed
in his possession and at his disposal.
He maintains a relation not only with his principal and the
purchases or vendor, but also with the property which is the
subject matter of the transaction.
An agent receives commission upon the successful conclusion of
a transaction such as sale.
A broker has no relation with the thing he buys or sells. He is
merely an intermediary, negotiator or "middle man" between the
vendor and the vendee with regard to the real property subject
of their transaction.
He has no concern over the custody or possession of the real
property.
His only office is to bring together the parties to the transaction
never acting in his own name but in the name of those who
employed him. In effecting a transaction, he acts in a certain
sense as the agent of both parties.
A broker earns his pay/ commission merely by bringing the
buyer and the seller together to obtain a meeting of the minds.
 How Different are the Duties and Responsibilities of the Agent
and Broker to their Client?
AGENT
• Agent is engaged in the purchase and sale of the personal
property for the principal
• Goods are placed in his possession and at his disposal
• He has relation not only with his principal and the
buyer/sellers, but also with the property constituting the
object of the sale
• He may act in his own name or in the name of his principal
• Subject matter refers only to personal property
BROKER
• Act as middleman or intermediary who, in behalf of others, and for
a commission or fee, negotiates contracts or transactions relative
to a real or personal property.
• He does not have the possession or custody of the property.
• He has no relation with the real or personal property he buys or
sell.
• He merely acts as a go between or intermediary between the seller
and buyer and cannot close the contract in his own name.
• Subject matter refers to either real or personal property
RULE ON BROKER’S ENTITLEMENT TO
COMMISSION

The settled rule as stated by the courts is that, in the absence of an

express contract between the broker and his principal, the implication
generally is that the broker becomes entitled to the usual commissions
whenever he brings to his principal a party who is able and willing to
take the property and enter into a valid contract upon the terms then
named by the principal, although the particulars may be arranged and
the matter negotiated and completed between the principal and the
purchaser directly.
DOCTRINE OF EFFICIENT PROCURING
CAUSE
Refers to a cause originating a series of events which, without break in
their continuity, results in the accomplishment of the prime objective of
employing the broker - to produce a purchaser ready, willing and able to
buy real estate on the owner's terms.

To be regarded as the procuring cause of a sale, a broker's efforts must

have been the foundation of the negotiations which subsequently
resulted in a sale.[19] "The broker must be the efficient agent or the
procuring cause of the sale. The means employed by him and his efforts
must result in the sale.
THANK
YOU!

END SLIDE