Obligations of the Agent Flashcards
Generally, what is the obligation of the agent to the principal?
As the relationship of agency is fiduciary, generally, it is the duty of the agent to act with the utmost good faith and loyalty for the furtherance and advancement of the interests of the principal.
What are the specific obligations of the agent to the principal?
The specific obligations of an agent to his principal are:
(1) Act within the scope of his authority
(2) Carry out the agency which he has accepted
(3) Act with diligence
(4) Advance necessary funds
(5) Prefer interest of the principal over personal interest
(6) Render account/deliver
(7) Be solidary or personally liable
(8) Pay interest
What is the rule with regards to the specific obligation of the agent to act within the scope of his authority?
According to the Civil Code, the agent must act within the scope of his authority. He may do such acts as may be conducive to the accomplishment of the purpose of the agency.
What is the rule if the agent acted outside the scope of his authority?
Generally, if the agent acted outside the scope of his authority, the principal is not bound by the actions of the agent, unless the principal ratifies such act. However, the authority of the agent shall not be considered exceeded should it have been performed in a manner more advantageous to the principal than that specified by him.
What is the rule with regards to the specific obligation of the agent to carry out the agency which he has accepted? When should he not carry out the agency?
Under the Civil Code, the agent is bound by his acceptance to carry out the agency, and is liable for the damages that the principal will suffer because of the former’s non-performance.
He must also finish the business already begun on the death of the principal, should delay entail any danger.
The agent must not carry out an agency if its execution would manifestly result in loss or damage to the principal.
What is the rule in case a person declines the agency?
In case a person declines the agency, he is bound to observe the diligence of a good father of a family in the custody and preservation of the goods forwarded to him by the owner.
In the part of the owner, he shall appoint an agent or take charge of the goods as soon as practicable.
What is the rule with regards to the specific obligation of the agent to act with diligence?
In the execution of the agency, the agent shall act in accordance with the instructions of the principal. In default thereof, he shall do all that a good father of a family would do, as required by the nature of the business.
What is the rule with regards to the specific obligation of the agent to advance necessary funds?
Should there be a stipulation that the agent shall advance the necessary funds, he shall be bound to do so except when the principal is insolvent.
What is the rule with regards to the specific obligation of the agent to prefer the interest of the principal rather than his personal interest?
The agent shall be liable for damages if, there being a conflict between his interests and those of the principal, he should prefer his own.
What is the rule with regards to the specific obligation of the agent to render account or deliver?
Every agent is bound to render an account of his transactions and to deliver to the principal whatever he may have received by virtue of the agency, even though it may not be owing to the principal. Every stipulation exempting the agent from the obligation to render an account shall be void.
What is the rule with regards to the responsibility of two or more agents?
Generally, the responsibility of two or more agents is not solidary if it is not expressedly stipulated, even though they are appointed simultaneously.
However, if solidarity is indeed agreed upon, each of the agents is responsible for the non-fulfillment of the agency, and for the fault and negligence of his fellow agents, except in the latter case when the fellow agents acted beyond the scope of their authority.
What is the rule with regards to the responsibility of the agent to pay interests?
The agent owes interest on the sums he has applied to this own use from the day on which he did so, and on those which he still owes after the extinguishment of the agency.
What are the rules when it comes to the agent contracting with third persons?
Generally, if an agent, within the scope of his authority, contracts with a third person, it is as if the principal directly contracted with the third person. The agent is not personally liable to the third person with whom he contracts, unless he expressly binds himself or exceeded his authority without giving such party sufficient notice of his powers.
If the agent contracts in the name of the principal, exceeding the scope of his authority, and the principal does not ratify the contract, it shall be void if the party with whom the agent contracted is aware of the limits of the powers granted by the principal. Otherwise, if the third party is not aware, the contract is unenforceable, unless ratified by the principal.
Can a third person set up the fact that the agent exceeded his powers?
Generally, a third person cannot set up the fact that the agent has exceeded his powers, if the principal has ratified, or has signified his willingness to ratify the agent’s acts.
Can an agent borrow money? Can he lend money too?
If an agent has been empowered to borrow money in behalf of the principal, the agent can be the lender at the current rate of interest.
If the agent has been authorized to lend money at interest, he cannot borrow it without the consent of the principal.
