ATP Flashcards
What is the relationship existing between principal and agent?
It is a fiduciary one, demanding conditions of trust and confidence.
ART. 1884. The agent is bound (tied to a promise or agreement) by his acceptance
to carry out the agency and is liable for the damages
which, through his non-performance, the principal may
suffer.
He must also finish the business already begun on
the death of the principal, should delay entail any danger.
(1718)
The duty of good faith is also called
the fiduciary duly which means?
Imposes upon the agent the obligation
of faithful service. The duty to be loyal to the principal demands that the agent look out for the best interests of the principal as against his own or those of the third party.
What is the presumption existing between the agent and principal?
the presumption arises that an agent has performed his duty in good faith, and the principal, until notice is received of a breach of relational duties, may rely upon his agent’s faithfulness.
An agent must obey all lawful orders and instructions of the principal within the scope of the agency. If he fails to do so, what will happen?
he becomes liable for any loss the principal incurs even though he can show that he acted in good faith or exercised reasonableness. Even a gratuitous agent must follow instructions or become responsible for any loss resulting from failure to do so. But an agent is not liable if he violates the principal’s instructions for a good reason. Related to the agent’s duty to obey instructions is the duty to keep within the limits of his authority when acting for the principal. An agent must know the extent of his authority. If he is in doubt, he should ask the principal for clarification.
Degree of diligence of an Agent
He will exercise reasonable care, skill and diligence. He does not agree that he will make no mistake whatsoever, or that he will exercise the highest skill or diligence, but he does agree that he will exercise reasonable skill, and that he will take the usual precautions (Mechem, Sec. 524, p. 360; see Art. 1909; British Airways vs. Courtof Appeals, 285 SCRA 450 [1998].) as a reasonably careful agent would under similar circumstances. Failure to do so constitutes a breach of his duty.
