1.

Agency
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
Relationship w/c implies a power in an agent to contract
with a 3rd person on behalf of a principal
Power to affect principals contractual relations w/ 3rd
persons that differentiates the agent from the employee,
servant, and independent contractor
2. Agency vs Partnership
A
P
Control by
Agent must submit to the
Power to bind his coprincipal
principals right to control the
partner is not subject to the
agents conduct in regard to
co-partners right to control
the subject of agency
(UNL agreement)
Liability of
Assumes no personal liability
Binds firm + members +
agent
(acts w/in scope of authority)
himself
Sharing of
An agreed measure of
Belong to all parties as
profits
compensation for his services common proprietors in
or the like
agreed proportions
3. When is principal bound by the acts of the agent
Requisites
o Agent must act WITHIN THE SCOPE of his
authority
o Agent must act ON BEHALF of the principal
Authority possessed by agent
o Actual authority (express or implied)
o Apparent authority (estoppel: only to 3rd persons
who relied)
Ratification by principal
o w/o authority or in excess/beyond unenforceable
(UNL ratified)
Excess of authority but more advantageous to principal
o Authorized to do such acts as may be conducive to
the accomplishment of the purpose of agency
4. Agency with undisclosed principal

(If the other party has no notice that the agent is acting for a
principal; existence and identity of principal is unknown to 3rd party)
GR: Agent will be held liable
o Authorized to act on behalf of principal + acts instead in
his own name
o No representation of the principal when agent acts in his
own name
o Contractual relation: between agent and 3rd person only
EXC: Contract involves things belonging to principal
o Contractual relation: principal and 3rd person
o Necessary: protection of 3rd persons against possible
collusion between agent and principal
o W/o prejudice to the principals right to demand from
agent damages for his failure to comply with agency
5. 10 specific obligations of an agent to principal
COFI-AND-LDR-BISIDIR
CARRY OUT agency
OBSERVE dgfoaf in custody and preservation of goods
FINISH business already begun on the death of the principal
should delay entail any danger
Act in accordance w/ INSTRUCTIONS of principal or dgfoaf
ADVANCE necessary funds
NOT carry out agency resulting in loss/damage to principal
Answer for DAMAGES thru non performance principal may
suffer
Not to LOAN to himself if he has been authorized to lend money
at interest
Answer for DAMAGES preferring his interest than his principal
RENDER an account and deliver what he received
BEAR risk of collection
Pay INTEREST on funds he applied to his own use
Liable for acts of SUBSTITUTE
INFORM principal when an authorized sale of credit has been
made of such sale
DISTINGUISH goods by countermarks and designate
merchandise respectively
INDEMNIFY principal for damages

RESPONSIBLE for fraud/negligence