Obligations of the Principal Flashcards
What are the specific obligations of the principal?
(C) Comply with the contracts contracted by the agent
(A) Advance the necessary sums
(P) Pay the agent
(R) Reimburse the agent
(I) Indemnify
What is the rule with regards to the specific obligation of the principal to comply with the contracts contracted by the agent?
The agent must comply with all the obligations which the agent may have contracted within the scope of his authority.
Generally, the principal is not bound to the contracts contracted by the agent if the latter has exceeded his authority. Exception to this rule is if the principal ratifies the contract, or the principal allowed the agent to act as if he has full power.
What is the rule with regards to the specific obligation of the principal to advance the necessary sums?
The principal must advance to the agent, should the latter so request, the sums necessary for the execution of the agency.
What is the rule with regards to the specific obligation of the principal to pay the agent?
Agency is presumed to be for a compensation, unless there is proof to the contrary.
What is the rule with regards to the specific obligation of the principal to reimburse the agent?
Should the agent have advanced them, the principal must reimburse him therefor, even if the business or undertaking was not successful, provided the agent is free from all fault.
The reimbursement shall include interest on the sums advanced, from the day on which the advance was made.
What is the rule with regards to the specific obligation of the principal to indemnify the agent?
The principal must also indemnify the agent for all the damages which the execution of the agency may have caused the latter, without fault or negligence on his part.
What is the rule if there are two or more principals who appointed an agent?
If two or more persons have appointed an agent for a common transaction or undertaking, they shall be solidarily liable to the agent for all the consequences of the agency.
What is the rule if a person contracted with the agent, and the other person contracted with the principal with regard to the same thing and the two contracts are incompatible with each other?
Generally, the contract with the prior date shall be preferred.
If the agent acted in good faith, the principal is liable in damages to the person whose contract must be rejected.
If the agent acted in bad faith, the agent is responsible.
What are the instances where the principal is not liable for the expenses incurred by the agent?
(1) The agent acted in contravention of the principal’s instruction, unless the latter should wish to avail himself of the benefits derived from the contract.
(2) When the expenses were due to the fault of the agent.
(3) When the agent incurred them with knowledge that an unfavorable result would ensue, if the principal was not aware thereof.
(4) When it was stipulated that the expenses would be borne by the agent, or that the latter would be allowed only to a certain sum.
