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 principal’s contractual relations w/ 3rd persons that differentiates the agent from the employee, servant, and independent contractor

2. Agency vs PartnershipA P

Control by principal

Agent must submit to the principal’s right to control the agent’s conduct in regard to the subject of agency

Power to bind his co-partner is not subject to the co-partner’s right to control (UNL agreement)

Liability of agent

Assumes no personal liability (acts w/in scope of authority)

Binds firm + members + himself

Sharing of profits

An agreed measure of compensation for his services or the like

Belong to all parties as common proprietors in 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 principalo Authorized to do such acts as may be conducive to

the accomplishment of the purpose of agency4. 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 nameo No representation of the principal when agent acts in his

own nameo Contractual relation: between agent and 3rd person only

EXC: Contract involves things belonging to principalo Contractual relation: principal and 3rd persono Necessary: protection of 3rd persons against possible

collusion between agent and principalo W/o prejudice to the principal’s right to demand from

agent damages for his failure to comply with agency5. 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