REVIEWER IN AGENCY: **Unenforceable, but can be ratified by the Principal

AGENCY ***Valid, provided that at the time of the delivery, the agent can transfer
- By the contract of agency, a person binds himself to render some ownership. Otherwise, the contract is VOID.
service or to do something in representation of on behalf of
another, with the consent or authority of the latter KINDS:
1. As to manner of creation
PARTIES: a. Express (Actual) – when the principal and agent enters into
1. Principal – must be capacitated to give consent an agreement
2. Agent –must be able to bind himself b. Implied (Apparent) -
 Principal - Art 1869 - by the acts of the principal, his
Q: Who is more powerful? silence, inaction or failure to repudiate
A: the Principal because the agent merely derives his power from the  Agent - Art 1872 – 1. He receives the Power of Atty w/o
principal. any objection; or 2. He fails to reply to the letter sent by
the Principal
Q: Can a minor be an agent? Is it valid?
A: YES. He merely represents the Principal. Thus, only the capacity of the 2. As to the form
Principal is necessary. a. Oral – EXN: Art 1874 – Sale of land
b. Written
TWO PRINCIPLES OF TRUE AGENCY: c. Mixed
1. The agent acts in representation/ on behalf of the Principal
2. The agent acts within the authority given to him by the Principal PURPOSE:
- To increase the range of the individuality and corporate activity of
APPLICATION: the Principal by enabling him to be constructively present in many
w/ Authority On behalf of the Principal? Status places at the same time.
1 Yes Yes Valid - Execution of juridical acts possible of accomplishment which:
2 Yes No (in his own behalf) Art. 1883* (PLDT)
3 No Yes Unenforceable** a. Must not be PERSONAL;
4 No No (in his own behalf) Valid*** b. Must be LEGAL;
Notes: c. Must be DETERMINABLE;
*Art 1883 – the Principal has no cause of action against the 3rd person to d. Must be TRANSMISSIBLE
whom the agent contracted, and vice versa. Except, contracts involving
things belonging to the Principal.
CHARACTERISTICS: 6. O – Obligate the Principal as surety/ guarantor
1. Voluntary 7. S – Service w/o compensation
2. Consensual 8. P – Partnership
3. Preparatory 9. R – Ratify obligations
4. Principal 10. I – Inheritance
5. Nominate 11. N – Novation
6. Bilateral 12. G – Gifts
7. Commutative 13. C – Compromise, enter into arbitration, waive
8. Fiduciary 14. O – Other acts of strict dominion
9. Personal 15. W – waive obligations gratuitously
10. Representative
11. Derivative HOW IS CONTRACT OF AGENCY CREATED?
1. Contract – express or implied
ESSENTIAL ELEMENTS: 2. By operation of law:
1. Consent a. By necessity - (Art 1885 – a person declines the agency)
2. Object b. By ratification -
3. Consideration c. By estoppel –
4. The agent acts in representation of the principal d. Labor Union -
5. The agent acts w/in the scope of his authority e. Corporation/ Firm/ Association -

General Agent – all the business of the principal
Special Agent – W/ specific instructions
SPA – acts of administration and dominion
GPA – acts of administration only
SPA is necessary in the following acts: CALL MO SPRING COW
1. C – create/ acquire real rights over immovable prop
2. A – acquire or enter into contracts transferring ownership of an
immovable prop
3. L – Lease immovable prop to another for more than 1 year
4. L – Loan/ borrow money, unless urgent
5. M – Make payments not considered acts of administration
PERSONAL LIABILITY OF THE AGENT:
The agent is not personally liable if he:
1. Acts in representation of the principal
2. Acts w/in his authority
RATIFICATION OF THE ACTS OF THE AGENT BY THE PRINCIPAL
GR: the Principal is not bound when the Agent exceeded his authority
EXN: When the Principal ratifies the act, expressly or tacitly
OBLIGATIONS OF THE PRINCIPAL:
1. To comply with all the obligations of the contract entered into by the
agent (Art 1910)
 EXN: Ultra vires acts of the agent – the principal is not required to 7. To advance necessary funds, if stipulated, except if the principal
comply becomes insolvent
EXN to the EXN: 8. To render an account of his transactions;
a. the principal ratified the acts of the agent 9. Obligation for the acts of the substitute;
b. the principal is guilty of laches/ estoppel 10. Obligation not to carry out the agency if it would result to loss or
c. the principal placed in the hands of the agent instruments signed by damage to the principal.
him in blank – negligence on the part of the principal
d. the principal acted in bad faith to deceive 3rd persons MODES OF EXTINGUISHMENT OF AGENCY: EDWARDO
e. connivance between the P and the A to deceive 3 rd persons 1. E – Expiration of the period
f. the principal accepted the proceeds/ benefits from the 3rd person 2. D - Death
3. W - Withdrawal
2. To compensate the agent; 4. A - Accomplishment
If agreed upon – commission 5. R – Revocation
If there is no agreement – reasonable amount 6. D - Dissolution
7. Other modes:
3. Indemnify the agent for expenses and damages he incurred in the a. Termination by mutual consent
execution of the agency, provided it is not due to his fault or b. Novation
negligence (Art 1912) c. Loss of the subject matter of the agency
d. Outbreak of war
4. Reimburse the agent of necessary funds for the execution of the
agency and for the sums advanced; and

5. Payment of interest on the sums advanced by the agent on the day on

which the advance was made

OBLIGATIONS OF THE AGENT:

1. Obligation to carry out the agency -
2. Fiduciary duty – observe good faith and loyalty
3. Obligation to prefer the interest of the principal-
4. Obligation to act in accordance with the instructions of the principal;
5. Obligation to finish the business already began on the death of the
principal should delay entail any danger;
6. To exercise reasonable care;