Abby Gail A.

Tiongson RELEBUS
AC181

Law on Agency

Based on the learning materials I read, agency is formed when two parties gave consent

to an agreement where one of them authorized the other to do something on their behalf with a

third party. Authorization is a very important element in agency as to validate its legality and the

scope of obligations an agent must fulfill, the absence of this can void the existing agency. The

agent may get commission or not depending on the agreement of the parties. The principal or

the person who gives the authorization, may give notice of agency by special information or by

public advertisement. I also came across the term “Special Power of Attorney” and it sounded

familiar. After I asked my mom about it, I remembered that this was a document my father

received when his superior authorized him to receive and deposit the salaries of his co-workers

in their bank account on his superior’s behalf. I also remembered that my mom received the

same document when a relative, who is living overseas, asked her to work on the necessary

papers and payments in order for my relative to sell the land that she owns.

One key takeaway I learned is that disclosing the name of the principal to a third party

can make a difference in terms of knowing who’s liable. If a principal is disclosed partially

disclosed, the 3rd person has the liberty to sue the principal or the agent whoever caused him to

suffer a loss and didn’t act on goodwill. While if the principal is undisclosed, the 3 rd party can

only sue the agent directly. However, if the agent acted on goodwill and did not exceed the

scope of his/her authority he may sue the principal to cover for his loss.

To better explain what I learned, let me give a simple example of agency that I

unintentionally applied in my life. My sister is an aspiring baker. She sells cookies and dream

cakes in our school through pre-orders. We had a verbal agreement instead of a written one

regarding my share of helping her sell her products, which we both consented. She authorizes
Abby Gail A. Tiongson RELEBUS
AC181

me to sell her cookies and dream cakes. This includes accepting pre-orders, delivering and

receiving payments on her behalf. After I arrived home, I will give her the money I received. I

acted accordingly based on the scope of what’s authorized upon me. This is a clear example of a

unilateral agency because the essential elements of agency are present: consent from the parties

are established, existence of the subject matter of the agreement in relation to 3 rd persons, as an

agent, I acted within the scope of my authority and as a representative of my sister’s little

business. Thus, I can become liable to the 3 rd party if I exceeded the scope authorized upon me

by my sister.

In conclusion, agency exists when someone opts to authorize another with his consent to

transact or render a service on their behalf with a third party. Which in turn, the agent has an

obligation to the principal to render the transaction. This would mean that the transaction

between the agent and the third person is legally between the principal and third party. The agent

only acted like a representative of the principal.