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inals Reviewer A GENCY 2 nd Sem; 2003 Chapter 1. Nature, Form and Kinds of Agency Art. 1868.

By the contract of agency a personbinds himself to render some servic e or to dosomething in representation or on behalf of another, with the consent or authority of thelatter. Agency: A relationship which implies a power in anagent to contract with a 3 rd person on behalf of aprincipal.Kind of Contract: It is a preparatory contract. I t is acontract entered not for its own end but to be able toenter into other con tracts.Characteristics:1.) Consensual : perfected by mere consent; 2.) Nominate : it has its own name; 3.) Principal : does not depend on another contractfor its existence and validity; 4.) Preparatory : entered into as a means to an end; 5.) Unilateral/Bilateral :a.) Unilateral : if contract is gratuitous, itcreates obligations for only one of theparties, i .e. agent.b.) Bilateral : if for compensation, it givesrise to reciprocal rights and obligs.Basis: Repre sentation.The acts of the agent on behalf of the principal withinthe scope of hi s authority produce the same legal andbinding effects as if the principal person ally did them.Distinguishing Features:1.) Representative character; and2.) Derivative authority.Purpose: To extend the personality of the principalthrough the facility of the agent.Parties:1.) Principal ; and2.) Agent

.Who can be principal?The principal may be a natural person or a juridicalperson . He must be capacitated. The rule is if a personis capacitated to act for himse lf or in his own right, hecan act through an agent.Must the agent have capacity? Insofar as 3 rd persons are concerned, it is enoughthat the principal is capacitated; but insofa r as hisobligations to his principal are concerned, the agentmust be able to bin d himself.Essential Elements of Agency:1.) Consent, express or implied;2.) Object of the contract is the execution of a juridical act in relation to 3 rd persons;3.) The agent acts as a representative and not forhimself;4.) The agent acts within the scope of his authority. Acts that cannot be done through an agent:1.) Personal acts : if personal performance is reqd bylaw or public policy or agreement;2.) Criminal or illegal acts : attempt to delegateanother authority to do an act which, if done bythe princip al would be illegal, is void.Nature of Relation between Principal and Agent:Fidu ciary, based on trust and confidence.Agency v. Lease of Work or Service Agency Lease of Work/Service Basis is representation. Basis is employmentAgent exercisesdiscretionary powers. Lessor only performsministerial functions.3 persons are involved:principal, agen t & 3 rd person.Only 2 persons involved:lessor and lesseeCommercial or businesstransacti ons.Matters of mere manual ormechanical execution.Agency v. Guardianship Agency Guardianship Agent represents acapacitated person.Guardian represents anincapacitated person. Agent appointed byprincipal and can beremoved by him.Guardian appointed bycourt and stands in locoparentis.Agent subject to directionsof principal.Guardian not subject todirections of ward butmust act for his benefit.Agent can make principa lpersonally liable.Guardian has no power toimpose personal liability onhis ward. Agency to Sell v. Sale Agency to sell Sale Agent receives the goodsas the goods of theprincipal.Buyer receives the goodsas owner.Agent delivers proceeds of the sale.Buyer pays the price.Agent can return object incase he is unable to sell toa 3 rd person.Generally, buyer cannotreturn the object sold.Agent in dealing with theth ing received is bound toact accdg to theinstructions of his principalBuyer can d eal with thething as he pleases, beingthe owner. Helen C. Arevalo 1 Section II-D