Extinguishment of Agency Flashcards
What are the instances when the agency is extinguished?
(E) Expiration of the period for which the agency was constituted.
(D) Death, civil interdiction, insanity or insolvency of the principal or of the agent
(W) Withdrawal of the agent
(A) Accomplishment of the object or purpose of the agency
(R) Revocation of the agency
(D) Dissolution of the firm or corporation which entrusted or accepted the agency
What is the rule with regards to the death, civil interdiction, insanity, or insolvency of the principal or of the agent resulting to the extinguishment of the agency?
Generally, if either of the agent or principal dies, the agency is extinguished.
Exceptions to this rule are:
(1) Even after the death of the principal, the agency was constituted in the common interest of the latter and of the agent, or in the interest of a third person.
(2) Anything done by the agent, without knowledge of the death of the principal or any other cause which extinguishes the agency, is valid and shall be fully effective with respect to third persons who may have contracted with him in good faith.
How can an agency be revoked?
Generally, the principal may revoke the agency at will, whether express or implied.
However, revocation can also be done through:
(1) Appointment of a new agent for the same business or transaction upon notice thereof to the previous agent.
(2) The principal directly manages the business entrusted to the agent, dealing directly with third persons.
(3) When two or more principals have granted a power of attorney for a common transaction, any one of them may revoke the same without the consent of the other.
(4) A general power of attorney is revoked by a special one granted to another agent.
What is the effect of the revocation of the agency with respect to the contracts with third persons?
The revocation of the agency shall not prejudice the third persons who acted in good faith and were not given notice thereof.
When can an agency cannot be revoked?
An agency cannot be revoked if a bilateral contract depends upon it, or if it is the means of fulfilling an obligation already contracted.
