Group 3 Flashcards
What is the essence of an agency relationship?
a) The agent acts on their own behalf
b) The agent acts as a representative of the principal
c) The agent takes full ownership of the principal’s business
d) The agent does not need the principal’s consent
b) The agent acts as a representative of the principal
Which of the following is NOT a characteristic of a contract of agency?
a) Consensual
b) Unilateral in all cases
c) Nominate
d) Bilateral
b) Unilateral in all cases
Which article of the Civil Code defines agency?
a) Article 1868
b) Article 1880
c) Article 1895
d) Article 1900
a) Article 1868
What is the general rule regarding acts that may be delegated to an agent?
a) All acts may be delegated without restriction
b) Personal acts and acts prohibited by law cannot be delegated
c) Only business-related acts can be delegated
d) The agent can delegate acts without the principal’s consent
b) Personal acts and acts prohibited by law cannot be delegated
What are the two general types of agency based on manner of creation?
a) Voluntary and involuntary agency
b) Express and implied agency
c) Gratuitous and compensated agency
d) General and special agency
b) Express and implied agency
When is an agent liable for the acts of a sub-agent?
a) If the agent was not authorized to appoint a sub-agent
b) If the agent appointed a notoriously incompetent substitute
c) If the principal did not allow the substitution
d) All of the above
d) All of the above
What is the meaning of “Qui facit per alium facit per se” in agency law?
a) He who acts through another, acts himself
b) The agent is independent from the principal
c) The agent must act in his own interest
d) An agent’s authority cannot be revoked
a) He who acts through another, acts himself
What is required for a pledge to be enforceable against third parties?
a) A notarized contract
b) Registration in a public record
c) Delivery of the pledged item to the pledgee
d) Both b and c
d) Both b and c
Under Article 1897, when is an agent personally liable to third parties?
a) When the agent acts within the scope of authority
b) When the agent exceeds their authority without notice
c) When the agent follows the principal’s instructions
d) When the agent contracts in the principal’s name
b) When the agent exceeds their authority without notice
Under Article 1919, which of the following does NOT automatically extinguish an agency?
a) Revocation by the principal
b) Death of the principal or agent
c) Expiration of the agency period
d) The agent’s failure to perform
d) The agent’s failure to perform
In a contract of pledge, who retains ownership of the pledged item?
a) The pledgee
b) The pledgor
c) The bank
d) The government
b) The pledgor
What is the key difference between a real mortgage and a chattel mortgage?
a) A real mortgage involves movable property, while a chattel mortgage involves immovable property
b) A real mortgage involves immovable property, while a chattel mortgage involves movable property
c) A chattel mortgage does not require a contract
d) A real mortgage does not require registration
b) A real mortgage involves immovable property, while a chattel mortgage involves movable property
Under Article 1908, when is a commission agent liable for damages?
a) When they fail to collect credits due and demandable
b) When they disclose the buyer’s name
c) When they sell goods at a higher price
d) When they return the goods to the principal
a) When they fail to collect credits due and demandable
Which of the following extinguishes a mortgage?
a) Destruction of the mortgaged property
b) Sale of the mortgage to another lender
c) The debtor’s bankruptcy
d) The principal’s inability to pay
a) Destruction of the mortgaged property
When does a guarantee commission make a commission agent liable?
a) When the buyer defaults on payment
b) When the goods are delivered late
c) When the agent does not make a written statement about damaged goods
d) When the principal refuses to acknowledge the sale
a) When the buyer defaults on payment
What is the primary purpose of an agency?
a) To create a new legal entity
b) To extend the personality of the principal through an agent
c) To allow agents to act independently
d) To avoid liabilities in business transactions
b) To extend the personality of the principal through an agent
Which of the following is NOT an element of a contract of agency?
a) Consent of the parties
b) A valid consideration
c) The agent acts as a representative
d) The agent acts within the scope of authority
b) A valid consideration
What type of agency is created when the principal explicitly states their consent, either orally or in writing?
a) Implied Agency
b) Express Agency
c) General Agency
d) Ostensible Agency
b) Express Agency
In an agency, who is responsible for authorizing the agent to act on their behalf?
a) Sub-agent
b) Principal
c) Third party
d) Commission agent
b) Principal
Which of the following is NOT a mode of extinguishing an agency?
a) Revocation by the principal
b) Withdrawal by the agent
c) Completion of the agency’s purpose
d) Resignation of a third party
d) Resignation of a third party
What is the general rule regarding acts that may be delegated to an agent?
a) Any act can be delegated
b) Only personal acts can be delegated
c) Only acts allowed by law can be delegated
d) Any act except personal acts or those prohibited by law
d) Any act except personal acts or those prohibited by law
If an agent accepts an agency but fails to carry it out, what is the consequence?
a) The agency remains valid
b) The principal must compensate the agent
c) The agent is liable for damages suffered by the principal
d) The agent is automatically excused
c) The agent is liable for damages suffered by the principal
What is the effect of revocation of agency by the principal?
a) The agency continues as long as the agent wishes
b) The agency is terminated immediately
c) The agent must continue to act until a replacement is found
d) The agent automatically gains ownership of the agency
b) The agency is terminated immediately
When can an agency NOT be revoked?
a) When it is for the mutual interest of both principal and agent
b) When the principal loses confidence in the agent
c) When the agent requests termination
d) When a third party objects to the revocation
a) When it is for the mutual interest of both principal and agent
Under what condition can an agent appoint a substitute?
a) Always
b) When not prohibited by the principal
c) Only when dealing with financial transactions
d) Only when they have express written permission
b) When not prohibited by the principal
What is the effect of the death of the principal on an agency?
a) The agency continues indefinitely
b) The agency is automatically terminated, except in certain cases
c) The agent must notify the heirs before continuing
d) The agent assumes the principal’s role
b) The agency is automatically terminated, except in certain cases
When does a pledge become enforceable against third parties?
a) Only when written consent is provided
b) When the pledged item is delivered to the creditor
c) When the pledgee becomes the owner of the item
d) When the pledgee sells the pledged item
b) When the pledged item is delivered to the creditor
When does implied agency arise?
a) When the agent acts in their own name
b) When the principal explicitly authorizes the agency
c) When the principal’s actions, silence, or inaction indicate consent
d) When a contract is notarized
c) When the principal’s actions, silence, or inaction indicate consent
What is a general agency?
a) An agency that allows an agent to act in any legal matter
b) An agency covering all business of the principal
c) An agency that only covers a specific transaction
d) An agency that requires notarization
b) An agency covering all business of the principal
What is a special agency?
a) An agency covering only a specific transaction
b) An agency with unlimited authority
c) An agency requiring multiple agents
d) An agency granted by the government
a) An agency covering only a specific transaction
It is a form of agency that arises when the principal’s actions, silence, or failure to repudiate indicate consent to the agency relationship.
Implied Agency
Under the Nature of Agency, it is based on trust and confidence.
Personal Nature
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
Under the ways of informing Third Persons, if a person states by public advertisement that he has given a power of attorney to a third person, the latter thereby becomes a duly authorized agent with regard to any person.
Public Advertisement
It is a contract where a debtor delivers a movable property to a creditor as security for a debt.
Pledge
It is a legal term that refers to a contractual clause in a pledge or mortgage agreement where the creditor automatically acquires ownership of the collateral in case the debtor defaults.
Pactum Commissorium
It refers to a loan where real property (such as land or buildings) is used as collateral.
Real Mortgage
It involves personal property (often movable items) being used as collateral for a loan. This type of mortgage is often used for items like cars, machinery, or other equipment.
Chattel Mortgage
It is a type of agent or entity that acts on behalf of another (the principal) to perform specific tasks or transactions, and receives compensation in the form of a commission for their services.
Commission Agent
It is also known as the “Del Credere Agency.”
Guarantor Agency
This provision incentivizes the agent to be careful in selecting buyers and managing credit terms. Since they are taking on the risk, they have a strong interest in ensuring the buyer is creditworthy.
Due Diligence
This specific article says that 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 others.
Art. 1925
This specific article says that the appointment of a new agent for the same business or transaction revokes the previous agency from the day on which notice was given to the former agency, without prejudice to the provisions of the two preceding articles.
Art. 1923
This specific article says that the principal may revoke the agency at will, and compel the agent to return the document evidencing the agency. Such revocation may be express or implied.
Art. 1920
This specific article says that if agency has been entrusted for the purpose of contracting with specified persons, its revocation shall not prejudice the latter if they were not given notice thereof.
Art. 1921
Under the ways of informing Third Persons, if a person specially informs another that he has given a power of attorney to a third person, the latter thereby becomes a duly authorized agent with respect to the person who received the special information.
Special Information
The power of attorney shall continue to be in full force until the notice is rescinded in the same manner in which it was given.
Manner of Rescission
Under the Nature of Agency, the agent acts on behalf of the principal, and their decisions and actions, are legally considered as the principal’s actions.
Representative Nature
Under the Nature of Agency, the agent’s authority comes directly from the principal and is limited to the powers granted. Actions beyond this authority may not be legally binding.
Derivative Nature
It is the person who grants authority to another to act on their behalf.
Principal
Enumerate the 7 Characteristics of a Contract of Agency
- Principal
- Consensual
- Nominate
- Bilateral
- Commutative
- Onerous
- Preparatory
Two Parties to a Contract of Agency
- Principal
- Agent
Enumerate the 6 Modes of Extinguishment of Agency
- Revocation by the principal
- Withdrawal by the agent
- Death, civil interdiction, insanity, or insolvency of either party
- Dissolution of firm or corporation
- Accomplishment of purpose
- Expiration of period
