LAW ON AGENCY

CHAPTER 1: NATURE, FORM AND KINDS OF AGENCY

Contract of Agency is a contract whereby 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. (Art.

1868)

Characteristics:

1. Consensual

2. Nominate

3. Preparatory

4. Principal

5. Unilateral;

Bilateral (if agency is for compensation)

Nature: Since it is a contract there must be a

meeting of the minds as to consent, object, and

cause.

Exception to contractual nature:

a. When the agency is created by

operation of law

Ex: Agency by Estoppel

Basis:

• Representation: The acts of the agent on behalf

of the principal within the scope of his authority

produce the same legal and binding effects as if

they were personally done by the principal.

• Hence, the distinguishing features of agency are

its representative character & its derivative

authority.

Purpose: Extend the personality of the principal

through the facility of the agent

Capacity of the Parties:

1. Principal

a. He may be a natural or a juridical person

b. He must be capacitated. The rule is if a

person is capacitated to act for himself or

his own right, he can act through an