I. INTRODUCTION AND NATURE OF AGENCY

Question 1

Definition of Agency

Answer 1

ARTICLE 1868. By the contract of agency 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.

Question 2

Elements of Agency

Answer 2

(1) Consent - there is consent, express or implied, of the parties to establish the relationship;
(2) Object - the object is the execution of a juridical act in relation to a third person;
(3) Agent representation - the agent acts as a representative and not for himself; and
(4) Authority - the agent acts within the scope of his authority.
[Rallos v. Felix Go Chan 81 SCRA 251 (1978)]

Question 3

Parties to the Contract of Agency

Answer 3

1. Principal

2. Agent

Question 4

Article 1869. Agency may be (with regard to the PRINCIPAL)

Answer 4

(1) express, or
(2) implied from the acts of the principal,
(3) from his silence or lack of action, or
(4) his failure to repudiate the agency, knowing that another person is acting on his behalf without authority.

Agency may be oral, unless the law requires a specific form

Question 5

Article 1870. Acceptance by the agent may also be (with regard to the AGENT)

Answer 5

(1) express, or
(2) implied from his acts which carry out the agency, or
(3) from his silence or inaction according to the circumstances.

Question 6

Agency between ABSENT persons (Art. 1872)

Answer 6

GR: Acceptance of the agency CANNOT be implied from the silence of the agent.

EXC:
(1) When the principal transmits his power of attorney to the agent, who receives it without any objection-> IMPLIED;

(2) When the principal entrusts to him by letter or telegram a power of attorney with respect to the business in which he is habitually engaged as an agent, AND he did not reply to the letter or telegram.

NOTE: If email/electronic message: it must be seen

Question 7

Agency between PRESENT persons (Art. 1871)

Answer 7

Acceptance may also be implied if the principal delivers his power of attorney to the agent and the latter receives it WITHOUT any objection.

Question 8

If the agent contracts in the name of the principal, exceeding the scope of his authority, WITHOUT ratification of the principal (Art. 1898)

Answer 8

GR: UNENFORCEABLE if agent contracts in excess of his authority or without authority

EXC: UNLESS ratified by the principal -> ratification makes it binding on both principal and third person

SR (Specific Rule): It shall be VOID IF the party with whom the agent contracted is AWARE of the limits of the powers granted by the principal.

ETE:
In this case, however, the agent is liable if he undertook to secure the principal’s ratification.

Question 9

Elements of Ratification

Answer 9

(1) Agent took acts without authority
(2) Knowledge of the principal
(3) Capacity of principal to ratify
(4) Ratification of act in entirety

Question 10

A third person cannot claim that the agent has exceeded his powers when (Art. 1901)

Answer 10

(1) If the principal has ratified, OR

(2) Has signified his willingness to ratify the agent’s acts.

Question 11

When the principal is bound to comply/not comply with obligations (Art. 1910):

Answer 11

COMPLY: If the agent contracted them WITHIN the scope of his authority

NOT COMPLY: If the agent has exceeded his power

EXC: When he ratifies it expressly or tacitly

Question 12

GR: No one may contract in the name of another (Art. 1317)

Answer 12

EXC:

(1) If he has been authorized by the latter
(2) f he has a right under law to represent the latter

Effect: UNENFORCEABLE

ETE: Unless it is ratified expressly/impliedly by the person being represented before it is revoked by the other contracting party (Art. 1403).

Question 13

Object of Agency

Answer 13

Cannot be personal acts/criminal acts

Question 14

Consideration of Agency

Answer 14

GR: ARTICLE 1875. Agency is presumed to be for a compensation,

EXC: Unless there is proof to the contrary.