Beruflich Dokumente
Kultur Dokumente
I.
1.
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.
2.
3.
Since the agent assumes no personal liability, the agent does not
have to possess full capacity to act insofar as third persons are
concerned.
The parties (both principal and agent) must have legal capacities
to validly enter into an agency. However, if one of the parties has
no legal capacity to contract, then the contract of agency is not
void, but merely voidable by reason of vitiation in consent, which
means that it is valid until annulled.
If the principal is the one who has no legal capacity to
contract, and his agent enters into a contractual relationship in the
principals name with a third party, the resulting contract is
voidable and subject to annulment.
If the principal has legal capacity, and it is the agent that has
no legal capacity to contract, the underlying agency
relationship is voidable; and when the incapacitated agent
enters into a contract with a third party, the resulting contract
would be valid, not voidable, for the agents incapacity is
irrelevant, the contract having been entered into, for and in
behalf of the principal, who has full legal capacity.
(b)
(c)
Cause or consideration
Art. 1875. Agency is presumed to be for a compensation, unless there is
proof to the contrary.
When the rendering of service alone, and not the results, is the
primordial basis for which the compensation is given, then the
proof that services have been rendered should entitle the
agent to the compensation agreed upon.
(1)
Except:
o
Agents interests are adverse to those of the
principal;
o
Agents duty is not to disclose the information,
as where he is informed by way of confidential
information; and
o
The person claiming the benefit of the rule
colludes with the agent to defraud the principal
4.
Consensual
c.
d.
The main purpose is to allow the agent to enter into contracts with third
parties on behalf of, and which would be binding on, the principal.
The authority of the agent to act emanates from the powers granted to
him by his principal; his act is the act of the principal if done within the
scope of the authority.
e.
The powers of the agent are essentially derived from the principal, and
consequently, it is essentially fiduciary in nature.
They are based on trust and confidence, which must flow from the
essential nature a contract of agency that makes the agent the
representative of the principal.
2.
f.
5.
c.
6.
Nature
Kinds of Agency
a. Based on the Business or Transactions Covered
1. General Agency: encompasses all of the business of the principal
Purpose
Element
of
Representation
Representation
b.
Definition
EMPLOYMENT CONTRACT
The
relationship
between
capital and labor [which] are not
merely contractual. They are so
impressed with public interest
employee to render service for
the direct benefit of the
employer or of the business of
the employer
No representation
Employee does not have the
power to enter into juridical
relations on behalf of the
employer
b.
Element
of
Representation
Essence
Representation
Element
Control
c.
of
Power of Agent
or Lessee of
Services
Revocability
Obligation
Transfer
of
ownership over
the goods
Revocability
Statute
Frauds
of
AGENCY
Representation
MANAGEMENT AGREEMENT
Employment
Preparatory contract
Agent can execute juridical acts
(creation,
modification
or
extinction of relations with third
parties).
Revocable at the will of the
principal
e.
An
agency
to
sell
on
commission basis is not
covered
A contract of agency to
sell
is
valid
and
enforceable in whatever
form it may be entered
into.
AGENCY
Agent received the thing to sell
it, and does not pay its price,
but delivers to the principal the
price he obtains from the sale
of the thing to a third person,
and if he does not succeed in
selling it, he returns it.
True agent does not assume
personal responsibility for the
payment of the price of the
object of the agency
AGENCY
Agent represents his principal
SALE
The purported agent to pay for
the products received from the
purported principal within the
stipulated period, even when
there has been no sale thereof
to the public
Assumes personal liability for
the goods
Nature
services
rendered
Personal
Responsibility
Basis
d.
Representation
of
In relation to the
thing
to
be
bought or sold
Acquires
thing
possession
of
the
BROKERAGE
One who is engaged, for
others, on a commission,
negotiating contracts relative to
property with the custody of
which he has no concern; the
negotiator
between
other
parties, never acting in his own
name but in the name of those
who employed him. . . . a
broker is one whose occupation
is to bring the parties together,
in matters of trade, commerce
or navigation
Find third parties who may be
interested in entering into
contracts with other parties
over particular matter, and may
include negotiating in behalf of
both parties the perfection of a
contract, but that the actual
perfection must still be done by
the parties represented
No relation with the thing he
has been retained to buy or to
sell
Acquires
neither
the
custody
nor
the
possession of the thing he
sells; his only office is to
bring together the parties
to the transaction.
No fiduciary relation
Merely an intermediary
No such authority
Fiduciary
relation
Authority
to
enter
into
contracts in the
name of the
principal
Capacity
to
purchase
property of the
principal
Entitlement to
Commission
Broker
Is
Not
Legally
Incapacitated
to
Purchase
Property of the Principal
II.
(a)
(c)
The acceptance of the agency (i.e., agent has given his consent
to the agency arrangement) by the agent may be express, or
implied from his acts which carry out the agency, or from his
silence or inaction according to the circumstances
Whenever any agent enters into any contract in pursuance of the
agency, his acceptance of his designation as an agent is never
implied nor presumed, for precisely he enters into such
contract clearly in the name of the principal.
One who accepts an agency is from that time on bound by the
fiduciary duties of diligence and fidelity, such that if the fails to act
when the circumstances required that he should have so acted to
protect the interests of the principal, he can be made liable for
breach of duty.
A principal should never presume that an designated person
has accepted the agency by mere silence so that he should be
vigilant in protecting his rights.
b.
Special Agency: When the principal informs another person that he has
given a power of attorney to a third person (the agent), the latter
thereby becomes a duly authorized agent with respect to the person
who received the special information
Revocation of the agency shall not prejudice the latter if they were
not given notice thereof
General Agency: By public advertisement: latter thereby becomes a
duly authorized agent with regard to any person.
The power [of the agent] shall continue to be in full force until the
notice is rescinded in the same manner in which it was given.
The revocation of the agency will not prejudice third persons who
acted in good faith and without knowledge of the revocation;
Third parties (to the contract of agency) can take the word,
declaration and representation of the purported principal with
respect to the appointment of, and extent of powers, of the
purported agent
Agency by Estoppel
Art. 1873. If a person specially informs another or states by public
advertisement that the has given a power of attorney to a third
person, the latter thereby becomes a duly authorized agent, in the
former case with respect to the person who received the special
information, and in the latter case with regard to any person.
Art. 1911. Even when the agent has exceeded his authority,
the principal is solidarily liable with the agent if the former allowed
the latter to act as though he had full powers. (n)
3.
(1) Those entered into in the name of another person by one who
has been given no authority or legal representation, or who has acted
beyond his powers;
b.
Article 1878 does not state that the special power of attorney
be in writing; be that as it may, the same must be duly
established by evidence other than the self-serving assertion
of the party claiming that such authority was verbally given him.
c.
specified, and the agent may neither go beyond nor deviate from
the power of attorney.
d.
c.
Confession of judgment
d.
e.
f.
g.
h.
i.
j.
k.
l.
m.
n.
Power to sue
f.
g.
III.
10
2.
Exception:
If he fails to do so, he is liable for damages arising from Art. 19 of the Civil
Code on Abuse of Right, not arising from a contract
Autonomy of Contracts
3.
4.
5.
Duty of Obedience
Otherwise:
Since the agent had not given the principals consent to the
contract or transaction entered into with a third party, the
principal is not personally bound by the terms of such contract
or transactions
An agent not only has express powers, but also implied powers
emanating from the express powers granted to him; as well as
incidental powers necessary in order to achieve the purpose for
which the agency was constituted.
The agent shall not carry out an agency if its execution would
manifestly result in loss or damage to the principal
6.
11
Duty of Loyalty
a. Duty of Loyalty in General
Art. 1889. The agent shall be liable for damages if, there being a
conflict between his interests and those of the principal, he should
prefer his own. (n)
b.
When Agent Enters into a Contract in His Own Name on a Matter that
Falls With the Scope of the Agency
If the matters entered into by the agent in his own name are
matters that are within the scope of his authority or those
pertaining to matters that should pertain to the business of
the principal, the agent has breached his fiduciary duty of loyalty.
c.
Art. 1886. Should there be a stipulation that the agent shall advance
the necessary funds, he shall be bound to do so except when the
principal is insolvent. (n)
Under Article 1891 of the Civil Code, every agent is bound to deliver to
the principal whatever he may have received by virtue of the agency,
even though it may not be owing to the principal, and even when given
to him for his benefit.
d.
Duty to account will not apply if the agent or broker had informed the
principal of the gift or bonus or profit he received from the purchaser
and his principal did not object thereto.
6.
a.
12
b.
7.
(2)
(3)
8.
Art. 1911. Even when the agent has exceeded his authority, the principal is
solidarily liable with the agent if the former allowed the latter to act as
though he had full powers. (n)
The powers and duties of an agent are confined and limited to those
which are specified and defined in his written power of attorney, which
limitation is a notice to, and is binding upon, the person dealing with
such agent.
When the power of attorney of the agent has been reduced in writing
by the principal, it constitute, even as to third parties dealing with the
agent, the highest form of expression of the extent and limitation of the
powers of the agent, and third parties should contract on the basis of
such written instrument
(2)
Art.
(3)
b.
In such case the agent is the one directly bound in favor of the
person with whom he has contracted, as if the transaction were his
own, except when the contract involves things belonging to the
principal.
Art. 1898. If the agent contracts in the name of the principal, exceeding
the scope of his authority, and the principal does not ratify the contract,
it shall be void if the party with whom the agent contracted is aware of
the limits of the powers granted by the principal. In this case, however,
the agent is liable if he undertook to secure the principals ratification.
(1) General Rule: The Principal Is Not Liable; Agent May Be Liable
9.
d.
e.
a.
b.
IV.
4.
If the agent sell on credit with the authority of the principal, then
the agent shall so inform the principal with a statement of the
names of the buyers. If he fails to do so, the sale shall be deemed
to have been made for cash insofar as the principal is concerned.
5.
6.
7.
Art. 1910. The principal must comply with all the obligations which the agent may
have contracted within the scope of his authority.
As for any obligation wherein the agent has exceeded his power, the principal
is not bound except when he ratifies it expressly or tacitly. (1727)
Art. 1897. The agent who acts as such is not personally liable to the party with
whom he contracts, unless he expressly binds himself or exceeds the limits of his
authority without giving such party sufficient notice of his powers. (1725)
a.
Any obligation wherein the agent has exceeded his power, or acts
done by the agent outside of the scope of his authority, even when
entered into in the name of the principal, would not bind the principal,
and would thus not be void, but merely unenforceable
A person with whom an agent has contracted in the name and for the
account of his principal, has a right of action against the purported
principal, even when the latter denies the commission or authority of
the agent, in which case the party suing has the burden of proving
the existence of the agency
b.
2.
15
A contract of agency which is not contrary to law, public order, public policy,
morals or good custom is a valid contract, and constitutes the law between
the parties. The contract of agency entered into [by the principal and the
agent] is the law between them and both are bound to comply with its terms
and conditions in good faith.
Principal is Bound by the Contracts Made by the Agent in His Behalf
Art. 1911. Even when the agent has exceeded his authority, the principal
is solidarily liable with the agent if the former allowed the latter to act as
though he had full powers. (n)
The principal would still be bound personally for the acts of an agent in the
name of the principal, but outside of the scope of his authority:
(a)
When the principal ratifies such contract, expressly or tacitly (Art. 1910,
Civil Code);
(b)
When the principal has allowed the purported agent to act as though
he had full powers (Art. 1911, Civil Code); and
Art. 1918. The principal is not liable for the expenses incurred by the
agent in the following cases:
(1) If the agent acted in contravention of the principals instructions,
unless the latter should wish to avail himself of the benefit derived from
the contract;
(2) When the expenses were due to the fault of the agent;
(c)
3.
4.
When the principal has revoked the agency, but the third party have
acted in good faith without notice of such revocation.
Agency by estoppel or Doctrine of Apparent Authority
General rule: The principal is liable to injured third parties for the torts
committed by the agent at the principals direction or in the course and
within the scope of the agents authority.
Since the act of negligence was that of the agent, he also becomes
civilly liable to the injured parties, even when he acts in representation of
the principal.
d.
5.
6.
Should the agent have advanced them, the principal must reimburse
him therefor, even if the business or undertaking was not successful,
provided the agent is free from all fault.
The reimbursement shall include interest on the sums advanced,
from the day on which the advance was made. (1728)
V.
EXTINGUISHMENT OF AGENCY
1.
c.
16
2.
b.
Implied Revocation
Art. 1923. The appointment of a new agent for the same business or
transaction revokes the previous agency from the day on which notice
thereof was given to the former agent, without prejudice to the
provisions of the two preceding articles. (1735a)
Art. 1924. The agency is revoked if the principal directly manages
the business entrusted to the agent, dealing directly with third persons.
Art. 1926. A general power of attorney is revoked by a special one
granted to another agent, as regards the special matter involved in the
latter. (n)
(1)
(2)
Art. 1925. When two or more principals have granted a power of attorney
for a common transaction, any one of them may revoke the same without
the consent of the others. (n)
a.
Express Revocation
Art. 1921. If the agency has been entrusted for the purpose of
contracting with specified persons, its revocation shall not prejudice the
latter if they were not given notice thereof. (1734)
Art. 1922. If the agent had general powers, revocation of the agency
does not prejudice third persons who acted in good faith and without
knowledge of the revocation. Notice of the revocation in a newspaper
of general circulation is a sufficient warning to third persons. (n)
17
(3)
c.
a.
b.
18
3.
4.
An act done by the agent after the death of his principal is valid and
effective only under two conditions, viz: (1) that the agent acted without
knowledge of the death of the principal, and (2) that the third person
who contracted with the agent himself acted in good faith.
No duty on the heirs of the principal to notify the agent of the death of
the principal.
5.
6.
7.
19
Dissolution of a Corporation
Obligations of the Agent Even When the Agency is Extinguished