Nature, Form and Kinds of Agency

Art. 1868

Definition of agency
- a relationship which implies a power in an agent to contract with a third person on behalf of the principal.
- The power to effect the principals contractual relations with third persons that differentiates the agent from the employee, the servant, and the
independent contractor

Importance
- enables a man to increase the range of his individual and corporate activity by enabling him to be constructively present in many places and to
carry on divers activities at the same time

Characteristics
a. principal
b. nominate
c. bilateral
d. preparatory
e. commutative
f. generally onerous
g. fiduciary

Nature a contract
Basis representation constitutes the basis of agency
Purpose to extend the personality of the principal through the facility of the agent


Parties:

a. principal
- he whom the agent represents and from whom he derives authority; he is the one primarily concerned in the contract

b. agent
- he who acts or stands for another
- usually, he is given full or partial discretion, but sometimes he acts under a specific command

Elements of Agency

a. there is consent, express or implied, of the parties to establish the relationship;
b. the object is the execution of a juridical act in relation to third persons;
c. the agent acts as a representative and not for himself; and
d. the agent acts within the scope of his authority

Capacity of the Principal
a. capacitated to give consent;
b. natural or a juridical person

Capacity of an Agent
the same as the law on contracts
- able to bind himself but only insofar as his obligation to his principal is concerned;
- insofar as third persons are concerned, however, it is enough that his principal be the one capacitated, for generall y an agent
assumes no personal liability


Distinctions

Agency (A) vs. Partnership (P)

An agent acts not for himself, but for his principal; a partner acts for himself, for his firm, and for his partners. It may be even said that partnership is a
branch of the law on agency.

Agency vs. Loan

An agent may be given funds by the principal to advance the latters business, while the borrower is given money for purposes of his own, and he
must generally return it, whether or not his own business is successful. A lot however depends on the intent of the
parties.

Agency vs. Guardianship

1. The agent represents a capacitated person while the guardian represents an incapacitated person

2. The agent is appointed by the principal and can be removed by the latter while the guardian is appointed by the court and stands in locos parentis

3. The agent is subject to the directions of the principal while the guardian is not subject to the directions of the ward, but must of course act for the benefit of
the ward.
4. The agent can make the principal personally liable while the guardian has no power to impose personal liability on the ward.

Agency vs. Judicial Administration

(1) The agent is appointed by the principal while the judicial administrator (JA) is appointed by the court.

(2) The agent represents the principal while the JA represents not only the court but also the heirs and creditors of the estate.

(3)Agent generally does not file a bond while the JA files a bond.

(4)The agent is controlled by the principal thru their agreement while the acts of the JA are subject to the specific orders from the court.


Agency from Lease of property

(1)The agent is controlled by the principal while the lease is not controlled by the lessor

(2) The agency may involve things other than property while, obviously, a lease of property involves property only.

(3) The agent can bind the principal while the lessee, as such, cannot bind the lessor.

Agency from Lease of Services

1. The agent represents the principal while the lessor of services does not represent his employer
2. relationship can be terminated at the will of either principal or agent while in lease, generally, the relationship can be terminated only at the will of
the both
3. agent exercises discretionary powers while the employee has ministerial functions
4. in agency, it usually involves 3 persons: the principal, the agent, and a stranger while lease of services usually involves only two persons

NOTE: it should be understood however that an agent may incidentally render acts of service, while a lessor of services or employee may incidentally make
contracts

Agency vs. Contract with an independent contractor

a. the agent acts under the control of the principal, while the independent contractor is authorized to do the work according to his own method,
without being subject to the other partys control, except insofar as the RESULT of the work is concerned
b. the agent of the agent may be controlled by the principal while the employees of the contractor are not the employees of the employer of the
contractor
c. agent can bind the principal while ordinarily, the independent contractor cannot bind the employer by tort
d. the negligence of the agent is imputable to the principal while the negligence if the independent contractor is generally not imputable to his
employer

Agency vs. Negotiorum Gestio

a. in agency there is a contract caused by a meeting of the minds, expressly or impliedly while in negotiorum gestio, there is only a quasi-
contract, there having been no meeting of minds. Hence, the representation was not agreed upon
b. agent is controlled by the principal while the officious manager follows his judgment and the presumed will of the owner
c. in agency the legal relation is created by the parties while in negotiorum gestio the legal relationship is created by law (occasioned of course
by the acts of the manager)

Agency vs. Trust

a. an agent usually holds no title at all while the trustee may hold legal title to the property
b. usually, agent acts in the name of the principal while the trustee may act in his own name
c. usually, agency may be terminated or revoked at any time while the trusty is usually ended by the accomplishment of the purposes for which
it was formed
d. agency may not be connected at all with property while trust involves control over property
e. agent has authority to make contracts which will be binding on his principal while trustee does not necessarily or even possess such authority
to bind the trustor or the cestui que trust
f. agency is really a contractual relation while a trust may be the result of the contract or not: it may be created also by law