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Rights of the Agent Authority - Cause; emanates from the Principal, and is given to the

1892 - when the principal personally chooses an agent in spite of the
existence of a previous agent, then there is implied revocation Power - After the existence of the Cause, the Agent now has the power;
the effect of giving authority; power to act on behalf of the Principal.
Fundamental Obligations of an Agent
Carry out agency The agency must be equated with the principal.
Act within scope
Act on behalf of Principal In 1901, ratification prevents any issue on want of authority. However,
the third person may revoke the contract with the agent prior to the
Essence: Principals ratification.
Acting Within the Scope
Act within the Scope of the Authority
Authorized but Acted on his Name:
1881 - The agent must act within the scope of his authority. He may The Principal is not bound by the matter, because he exceeded his
do such acts as may be conducive to the accomplishment of the authority. If what is involved belongs to the Principal.
purpose of the agency (conducive to the accomplishment; act within
the scope of his authority) No Authority but Acted in the Name of the Principal:
Only the agent is liable, unless principal ratifies the act done by the
1882 - The limits of the agents authority shall not be considered agent.
exceeded should it have been performed in a manner more
advantageous to the principal than that specified by him.
Agent no Authority But Acted in His Name:
1900 - So far as third persons are concerned, an act is deemed to have Agent is personally liable.
been performed within the scope of the agents authority, if such act is
within the terms of the power of attorney, as written, even if the agent Act in Accordance within the Scope (within Instructions)
has in fact exceeded the limits of his authority according to an
understanding between the principal and the agent. 1887 - in the execution of the agency, the agent shall act in accordance
with the instructions of the principal.
1901 - a third person cannot set up the fact that the agent has exceeded
his powers, if the principal has ratified, or has signified his willingness Note the difference:
to ratify the agents acts. Authority - sets forth the parameters or the extent of the contract of
Given to the agent for the latter to follow with regard to the discharge 1929 - agent even if he should withdraw from the agency for a VALID
of its duties; has to do with the execution of the authority REASON, must continue to act as agent until the principal has had
reasonable time to take the necessary steps
Third persons dealing with the agent who are not privy to the matter
are not bound by the instructions.
The instructions, although not part of the agency forms part of the
agency. 1886 -

Instructions agreed upon determines the DEGREE OF DILIGENCE Duty To Promote Principal

Look into the contract, before the degree of diligence is appreciated. Liable for Damages, conflict of interest, must timely revoke the
contract of agency, but must make sure that the renunciation is done in
Faithful compliance removes liability from the agent, unless the good faith.
aforesaid exceptions. Exceeding his authority or dealing away with the
instructions may be a basis for his liability. Duty to Account

1899 - if a duly authorized agent acts in accordance with the orders of 1891 - bound to render an account in the transaction;
the principal, the latter cannot set up the ignorance of the agent as to
circumstances whereof he himself was, or ought to have been aware. No right to hold the money, only the object of the agency through
pledge. He is otherwise liable for estafa for doing so.
Goods entrusted must be in good condition, with the warranties
necessarily in place. Pay Interest

The one liable is the principal. 1896 -

CARRY OUT AGENCY Liable for Fraud or Negligence

1884 - Bound by acceptance, must also finish business began on the 1908
death of the principal

1888 - execution would manifestly result in loss or damage to the


1885 - decline agency, good father of a family, etc.


When the contract is silent, liability is ensured. If the period agreed upon had expired but the agent has continued to
make representations, would the contract of agency still arise?
Liable to third persons
If the principle is aware of what the agent has been doing, then there
1883 can be a contract of agency by estoppel

Rationale behind the exception of liability is to prevent collusion

between the principal and the agent.


1903 - 1908

Consignment - 100 k but it was paid on installment, the Principal may

demand the whole of 100 k and the additional money gained by the
agent shall be his.

Guarantee commission

Agent shall serve as a guarantor insofar as the purchasers are


Agent cannot use the defense of principle of excussion in instances

where he became the guarantor

A commission agent enters into the contract in his name and no right
of representation accrues in his favor.

1920 - revoke the agency at will, may be express or implied.

1930 1933 1884 par. 2 - exemptions on the extinguishment upon death