CELESTE, Allyzza Vienne C.

BLR (1312) MWF 6:00 - 7:00

AGENCY
CONTRACT OF AGENCY

- a person binds himself to render some services or to do something in representation

or on behalf of another with the consent or authority of latter

CHARACTERISTICS OF A CONSTRACT OF AGENCY

1. Consensual - it is perfected by mere consent

2. Principal - it can stand by itself without the need of another contract
3. Nominate - it has its own name
4. Unilateral - it is gratuitous, it creates obligations for only onne of the parties
5. Preparatory - it is entered into as a means to an end

ESSENTIAL ELEMENTS OF CONTRACT OF AGENCY

1. There is consent, express or implied of the parties to establish the relationship.

2. The object is the execution of a juridical act in relation to the third person.
3. The agent acts as a representative and not for himself.
4. The agent acts within the scope of his authority.

MANNER OR CREATION

1. Express
2. Implied
a. Acts of principal
b. Silence, lack of action
c. failure to repudiate agency

WHEN SPA NECESSARY

1. Make payments not deemed acts of admin.

2. Effect novations which end obligs.
3. Compromise, submit to arbitration, renounce right to appeal, waive objections to
venue, abandon
prescription acquired
4. waive obligations graduitously
5. Contract re: transmission or acquisition of ownership of immovable
6. Makes gifts
7. Loan or borrow money
8. Lease out real property to more than 1 year
9. Bind principal to render gratuitous service
10. Bind principal to contract of partnership
11. Obligate principal as guarantor or surety
12. Create or convey real rights
13. Accept or repudiate inheritance
14. Ratify or recognize obligations prior to agency contract
15. Acts of strict dominion

OBLIGATIONS OF AN AGENCY

1. To carry out agency

2. To answer for damages suffered by principal thru agents
performance/nonperformance
3. To finish business begun on death of principal if delay entail danger
4. To observe diligence of good father of family to preserve goods (if he declines
agency; until another
agent is appointed)
5. To advance necessary funds, it stipulated (except insolvent principal)
6. To act in accordance with instructions/ in default, do as a good father of a family
7. Not to carry out agency if execution will manifestly result in loss or damage
8. To answer for damage resulting from conflict of interest (if he prefers his own)
9. Not to loan to himself if authorized to lend, without consent of principal
10. To render account and deliver whatever received by virtue of the agency
11. To appoint sub-agent if allowed; Liable for acts of sub-agent if:
a. Not authorized to appoint
b. Authorized but sub-agent not specified, and person appointed was notoriously
incompetent or insolvent
12. To pay interest for funds used by him
13. To be responsible for and to distinguish goods received on consignment
14. To inform principal pf sale of credit (sale or credit must be with express or implied
consent of principal)
15. To bear risk of collection in guarantee commission
16. To indemnify principal for damages from failure to collect credits
17. To be responsible for fraud or negligence
18. To indemnify principal in case of damage due to his withdrawal except if grave
detriment to himself
19. To continue to act as agent until agent has taken necessary steps to replace him

WHEN PRINCIPAL NOT LIABLE FOR EXPENSES INCURRED BY AGENT

1. tested in contravention of principal’s instructions (unless principals avails of benefits)

2. due to fault agent
3. agent incurred them knowing that unfavorable result would be ensue, if principal
unaware
4. stipulated that expenses would be borne by agent or only allowed to a certain sum
OBLIGATIONS OF THE PRINCIPAL

1. To comply with obligations contracted by agent

2. To advance sums necessary for execution of agency
3. To reimburse agent for advances
4. To indemnify agent for damages resulting from execution of agency (right of agent to
retain in pledge thing/ object of agency until reimbursement/ indemnification)
5. To pay agent compensation

MODES OF EXTINGUISHMENT (EDWARD)

1. By Revocation
2. By agent’s Withdrawal
3. By Death, civil interdiction, insanity or insolvency of principal or agent
4. By Dissolution of firm or corp which entrusted or accepted the agency
5. By Accomplishment of object or purpose
6. By Expiration of the period
 CREDIT TRANSACTIONS
LOAN AND COMMODATUM

CONTRACT OF LOAN

1. one of the parties delivers to another

2. money or other consumable thing
3. upon condition that the same amount of the same kind and quality shall be paid

CONTRACT OF COMMODATUM

1. one of the parties delivers to another

2. something not consumable
3. so that the latter may use the same for a certain time and return it

RIGHT & OBLIGATIONS OF BAILEE

1. To pay for the ordinary expenses for the use & preservation of the thing loaned
2. To be liable for loss of the thing, even if gratuitous, when he (3LAPS)
a. Devotes thing for Purpose other than that specified
b. Keeps thing Longer than period stipulated or after accomplishment of purpose
c. Thing delivered with Appraisal value
d. Lends thing to a 3rd person not a member of house hold
e. Being able to save thing borrowed or his own thing, he Saves the latter

3. Not to answer for the deterioration of the thing loaned due only to use & without his
fault
4. Not to retain thing loaned on the ground that the bailor owes him something’ rt. Of
retention for damages allowed

RIGHTS & OBLIGATIONS OF BAILOR

1. Not demand return of thing loaned until retention for damages allowed
2. Demand thing at will in case of precarium
Where:
a. Neither duration nor use stipulated
a. use is merely tolerated by owner
3. Demand immediate return of thing if bailee commits act of ingratitude
4. Refund bailee for extraordinary expenses during contract for preservation of thing,
provided bailor
informed (except if urgent)
5. Share equally with bailee burden of extraordinary expenses incurred from actual use
of thing
6. Be liable for damages suffered by bailee for hidden flaws