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AGENCY

1. Define Agency?
LA- By the contract of agency, a person binds himself to render some service or to do something
in representation or in behalf of another, with the consent or authority of the latter.
LE- In an agency, a person employs another person to do any act for him or to represent him in
dealing with the third person so as to bind himself by the acts of such another person.
LB- Art 1868, RA 386
2. What are the characteristics of the contract of agency?
LA- (1)Principal (2)Consensual (3)Nominate (4)Bilateral (5)Commutative (6)Onerous
(7)Preparatory
LE- The contract of agency is (1)Principal because it does not need another contract for its
existence; (2)Consensual because it is perfected by mere consent; (3)Nominate because it has its
own name; (4)Bilateral because it creates obligation for the agent to render service and the
principal to compensate him, (if there is no compensation, then it is unilateral); (5)Commutative
because both parties are obligated to each other except in unilateral contract of agency;
(6)Onerous in bilateral contract because it is burdensome for both parties, (if the contract is
unilateral, then it is gratuitous (7)Preparatory because it is entered into by the parties in
preparation for another contract.
LB- Art 1307, 1350, 1458, 1475, 1315, 1191, 1308, RA 386
3. What is the purpose of agency?
LA- To extend the personality of the principal through the facility of the agent.
LE- It enables the activity of man which is naturally limited in its exercise by the impositions of
his physiological conditions to be legally extended by permitting the agent to be constructively
present in many different places and to perform diverse juridical acts and carry on many
different activities through another when physical presence is impossible or inadvisable at the
same time.
LB- Art. 1868, RA 386
4. Distinguish Agency from Partnership.
LA- 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; while by
the contract of partnership, two or more persons bind themselves to contribute money,
property, or industry to a common fund, with the intention of dividing the profits among
themselves.
LE- 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.
LB- Art 1868 and 1767, RA 386
5. Distinguish Agency from Loan.
LA- An agent may be given funds by the principal to advance the latter’s 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.
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6. Distinguish Agency from Negotiorum Gestio.
LA- In agency there is a contract caused by a meeting of minds, expressly implied while in
negotiorum gestio, there is only a quasi-contract, there having been no meeting of minds.
Hence, the representation was not agreed upon.
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7. Distinguish Agency from Lease of Service.
LA- 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
party’s control, except insofar as the result of the works concerned.
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8. Distinguish Agency to sell from Sale.
LA- Agency is distinguished from sale by the following: (1)Agent receives the goods of the
principal, while in sale the buyer receives goods as owner; (2)Agent delivers the proceeds of the
sale, while in sale buyer pays the price; (3)Agent can return the object in case he is unable to sell
the same, while in sale the buyer, as a rule, cannot return the object sold; (4)Agent is bound to
act according to the instructions of his principal, while in sale the buyer can deal with the thing
as he pleases being the owner.
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9. How is agency created?
LA- Agency is created by (1)Agency by Estoppel
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10. In what form shall the contract of agency be entered into?
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11. In what form shall the agent accept the agency?
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12. As between persons who are present, when can you say that the acceptance by the agent is
implied?
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13. Between persons who are absent, under what circumstances can the acceptance of the agent be
implied from the silence of the agent?
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14. What are the ways whereby the principal may announce the appointment of an agent?
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15. In what forms shall public advertisement be made?
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16. In what form shall a contract of agency be entered into?
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17. Is agency always for compensation?
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18. As to scope of business, how is agency classified?
LA- (1)General; (2)Special
LE- An agency is (1)General when it comprises all the business of the principal; (2)Special when it
comprises of one or more specific transactions.
LB- Art 1876, RA 386
19. What is general agency?
LA- One employed to transact all the business of the principal or all the business of a particular
kind for a particular place, and other way to do all acts, connected with a particular trade,
business or employment.
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20. When is agency special?
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21. As to extent of the power conferred, how is agency classified?
LA- (1)Couched in general terms; (2)Couched in specific terms
LE- An agency is (1)Couched in general terms when it has acts of dominion even if the principal
states: a.) that he withholds no power, b.) that the agent may execute such acts as he may
consider appropriate, c.) even though the agency should authorize a general and unlimited
management; (2)Couched in specific terms when it has acts of strict dominion or ownership.
LB- Art 1877, RA 386
22. What acts may the agent perform if his agency is couched in general terms?
LA- (1)He withholds no power; (2)The agent may execute such acts as he may consider
appropriate; (3)Even though the agency should authorize a general and unlimited management.
LE-
LB- Art 1877, RA 386
23. State the acts for which a special power of attorney is needed.
LA- (1)To make such payments as are not usually considered as acts of administration; (2)To
effect novation which put an end to obligation 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 judgement, 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; (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
dominions.
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LB- Art 1878, RA 386
24. If an agent is given a special power to sell belonging to his principal has he also the same power
to mortgage the same?
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25. Does a special power to compromise imply the power to submit to arbitration?
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26. How shall the agent act in carrying out the agency?
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27. If an agent is given a special power to sell principal’s car for P50,000.00 and the agent sells it for
P60,000.00, has the agent exceeded his authority?
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28. What are the requisites to be followed so that the principal will be bound to third persons with
whom the agent has contracted?
LA- (1)Where the principal’s acts have contributed to deceive third person in good faith;
(2)Where the limitations upon the power created by him could not have been known by third
person; (3)Where the principal has placed in his hands of the agent instruments signed by him in
blank; (4)Where the principal has ratified the acts of the agent.
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29. What are the effects if the agent acts in his name?
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30. What are the obligations of the agent?
LA- (1)Carry out the agency; (2)Finish the business already begun on the death of the principal
should delay entail any danger (exception to the rule that death extinguishes agency);
(3)Observe the diligence of a good father in the custody and preservation of the goods
forwarded to him by the owner in case he declines an agency, until an agent is appointed;
(4)Advance necessary funds if there be a stipulation to do so (except when the principal is
insolvent); (5)Act in accordance with the instructions of the principal, and in default thereof, to
do all that a good father of a family would do; (6)Not to carry out the agency if it would
manifestly result in loss or damage to the principal; (7)Answer for damages if there being a
conflict between his and principal’s interests, he prefers his own; (8)Not to loan to himself if he
has been authorized to loan money at interest; (9)Render an account of his transactions and
deliver to the principal whatever he may received by virtue of the agency; (10)Be responsible in
certain cases for the act of the substitute appointed to him; (11)Pay interest on funds he has
applied to his own use; (12)Act with utmost good faith and loyalty for the furtherance of
principal’s interests; (13)Obey principal’s instructions; (14)Exercise reasonable care; (15)Answer
for damages which through his non-performance the principal may suffer.
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LB- Art 1884, 1885, 1886, 1887, 1888, 1889, 1890, 1891, 1892, 1896, 1897; RA 386
31. What are the obligation of a person who declines an agency?
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32. When an agent not bound to advance the necessary funds to carry out the agency, even if there
is a stipulation to do so?
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33. How shall the agent execute the agency?
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34. Is the principal bound by the acts of the agent which are within the scope of his authority but in
violation of the instructions of the principal?
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35. In case an agent has been empowered to borrow money, can he himself be the lender?
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36. If the agent has been authorized to lend money at interest, can the agent himself be the
borrower?
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37. What is the effect of a stipulation exempting the agent form the obligation to render an
account?
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38. May the agent appoint a substitute?
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39. When shall the agent be responsible for the acts of the substitute?
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40. What are the effects of the acts of the substitute appointed against the prohibition of the
principal?
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41. In the cases where the agent shall be responsible for the acts of substitute has the principal
likewise a cause of action against the substitute?
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42. What is the nature of the responsibility of two or more agents appointed simultaneously by one
principal?
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43. If solidarity has been stipulated for what responsibilities shall they be solidarily liable foe?
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44. Under what cases shall the agent be liable for interest to the principal to the interest?
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45. When does an agent who acts as such incur personal liability?
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46. Who shall be bound by the contract entered into by an agent who acts in the name of the
principal and within the scope of his authority?
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47. If the agent acts in excess of his authority but in the name of the principal, shall the principal be
bound?
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48. If case the agent acts in his name of the principal but in excess of his authority and the principal
does not ratify the contract, can the third party hold the agent personally liable?
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49. In case of ignorance of the agent, can the principal set this up to avoid liability?
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50. As to third persons when is an act of an agent deemed to be within the scope of his authority?
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51. Is a third person with whom the agent has contracted would like to disaffirm his contract, can he
make use of the defense that the agent has exceeded his authority?
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52. To determine the exact authority of the agent, what is the duty if the third person whom the
agent wishes to contract on behalf of the principal?
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53. Who is a commission agent?
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54. How shall the commission agent be responsible for the goods received by him?
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55. What is the obligation of the commission agent who handles goods of the same kind and mark
belonging to different owners?
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56. Can the commission agent sell on credit?
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57. What is the liability of the commission agent who sells on the credit without the express or
implied consent of the principal?
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58. What is the obligation of the commission agent who is authorized by the principal to sell on
credit?
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59. Who is a Guarantee Commission agent or a “del credere” agent?
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60. What are the other liabilities of the agent in connection with the fulfillment of his obligation?
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61. Enumerate the obligation of the principal?
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62. Is the principal bound by the obligations incurred by the agent in excess of his authority?
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63. What is the remedy of the agent in case where the principal does not reimburse the agent for
the fund advanced by him and for the damages the agent has suffered in the execution of the
agency?
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64. When shall the principal be held solidarily liable with the agent?
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65. Under what circumstances shall two or more principals be held solidarily liable to the agent?
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66. For what shall the two or more principals be solidarily liable to the agent?
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67. What rules shall govern in the case where two persons contract separately with the agent and
the principal with regard to the same thing?
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68. In the preceding cases, who shall be liable in damages to the third person whose contract is
rejected?
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69. Under what cases shall the principal be not liable for the expense incurred by the agent?
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70. How is agency extinguished?
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71. Is agency generally revocable?
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72. In what manner may the principal revoke the agency?
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73. When shall the revocation of the agency not prejudice third persons?
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74. Give instances of implied revocation of the agency.
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75. If an agent is appointed by two or more principals for a common transaction, who of the two or
more principals may revoke the agency?
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76. Can a general agency be partially revoked?
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77. When is agency irrevocable?
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78. What is meant by an agency coupled with an interest?
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79. Can the agent withdraw form the agency at any time?
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80. What is the obligation of the agent after his withdrawal from the agency?
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81. When does death of his principal not revoke the agency?
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82. How does death of the principal affect the validity of the acts of the agent who was not aware of
the death of the principal?
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83. Does death of the agent extinguish the agency?
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