Partnership WWW 11.28.
2018 GR: Principal not bound if agent exceeded
Q1: All contracts executed by agent in excess of
authority are void.
False
Q2: Agent may disregard the instructions.
True.
Q3: Agent may sell to himself the object to
which he is obliged to sell.
False.
Q4: Agent is not liable for acts of sub-agent
appointed by the principal.
True
Q5: Once in writing, principal can never claim
that the agent exceeded his authority.
True
Q: Obligations of the Principal
1) To comply with the obligations contracted by
agent within the scope of his authority.
2) To advance necessary funds for execution of
agency advanced to the agent.
3) To reimburse agent for advances made by
him.
4) To indemnify agent for damages he suffered
in execution of agency without fault or
negligence on his part.
5) Compensation of agent paid.
authority.
Exc:
Ratification by Principal
Estoppel by Principal
Authority by Necessity
Act is beneficial to the principal
Principal signed in blank the document
Ratification – the principal accedes to the act of
the agent that was unauthorized. In effect, the
act of the agent is the act of the principal. It
cures the defect.
Elements of Ratification:
1) Capacity and power to ratify
2) Knowledge of material facts
3) Ratify in its entirety
4) Acts capable of ratification
5) Must be done in behalf of principal
Illustration 1:
Principal gave the Agent jewelries to show the
buyer. What kind of agent Is he?
Commission agent because he has in him the
possession of the jewelries.
On his way, he hit a pedestrian. Who will be
liable for the medical expenses?
In torts, the principal is civilly liable while the
agent is civilly liable and criminally liable.
In our case, the pedestrian may claim from the
principal and agent.
When he arrived at the house of the buyer, it
was too dark, he couldn’t see the buyer. “Kung
ipasiga nimo ang suga, mu palit ko.” So, he
fiddled with the wires and got electrocuted. ha? I deliver dayun.” Principal says “Ill deliver
Who will now bear the expenses? in 30 days”. Is he obliged to deliver?

Agent alone. Motivation-Deviation Test. Yes. Estoppel.

Motivation – the agent’s desire to do acts is for

principal
Ratification vs. Estoppel
Deviation – there must be no extreme deviation
Ratification is retroactive. Estoppel is proactive.
from the normal conduct of an employee.
Ratification, the substance is the confirmation
The agent failed the deviation test. Fiddling with
to the unauthorized acts. Estoppel, the
wires = extreme deviation because THERE WAS
substance is the inducement of 3rd parties.
DEVIATION FROM NORMAL HUMAN
BEHAVIOUR. Ratification rests on intent. Estoppel rests on
prejudice.
But, if the agent was an electrician, principal is
liable since there would be no deviation in this Ratification, there is intention. Estoppel, intent
case. “Ipasiga ra? Nadisgrasya lang.” doesn’t matter.

Rule: In estoppel what happens? What is estoppel?

Agent and Principal solidarily liable for torts Bar that precludes from asserting or denying an
provided it passes the motivation-deviation established fact.
test.

Illustration 2:

If the principal authorized the agent to sell his

property for P1M. But agent sold it for only
900k. Is principal obliged?

No. Agent acted in excess of his authority.

But if principal nevertheless accepts the 900k?

Ratification.

However, when he accepted the 900k, he told

the seller I’ll deliver only ½.

Invalid. Must be ratified in its entirety.

Illustration 3:

Agent authorized to sell for P1M. Sold it again

for 900k. Buyer called the principal “boss, 900k