Chapter 1.

Nature, Form and Kinds of Agency

Art. 1868. By the contract of agency, 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.

Agency: A relationship which implies a power in an agent to contract with a 3rd person on behalf of a
principal.

Kind of Contract: It is a preparatory contract. It is a contract entered not for its own end but to be
able to enter into other contracts.

Characteristics:
1.) Consensual: perfected by mere consent; 2.) Nominate: it has its own name;
3.) Principal: does not depend on another contract for its existence and validity;
4.) Preparatory: entered into as a means to an end; 5.) Unilateral/Bilateral:
a.) Unilateral: if contract is gratuitous, it creates obligations for only one of the parties, i.e. agent.
b.) Bilateral: if for compensation, it gives rise to reciprocal rights and obligations.

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 the principal personally did them.