Article 1868-1875 Sales Reviewer

ART. 1868 – Agency - Implies power in an agent to contract w/ 3rd parties on behalf of principal - XPT: employer-employee relationship, master-servant, independent contractor CHARACTERISTICS of Contract of Agency 1. Consensual – perfected by mere consent 2. Principal – can stand by itself 3. Nominate – has its own name 4. Unilateral – obligations for only one of the parties (agent) OR Bilateral – (compensation) gives rise to reciprocal rights and obligations 5. Preparatory – means to an end ESSENTIAL ELEMENTS of Agency 1. Consent, express or implied of the parties 2. Object is the execution of a juridical act 3. Agent acts as representative 4. Agent acts w/in the scope of his authority Nature, Basis, PURPOSE 1. Contract – consent, object, cause 2. Representative relation – on behalf. As if it was done by principal. Absence of P is transformed to legal, juridical presence 3. Purpose – extend personality of principal. Perform juridical acts thru another when his physical presence is impossible TWO (2) PARTIES involved 1. Principal – the agent represents 2. Agent – represents another CAPACITY of parties 1. Capacitated person may be a principal 2. Agent doesn’t have to possess full capacity to act XPN: absolutely incapacitated. Agents must be competent Acts DELEGATED to Agents 1. General – a man may do in person, he may do thru another 2. XPN:

a. Personal acts – right to vote, making of will, statements under oath, art. 1491 b. Criminal acts/acts not allowed by law – attempt to delegate is void, aliens cannot purchase land Distinction from other contracts 1. Loan – borrower must return won business is successful Agent – funds given by P to advance P’s business 2. Lease of service – employments, ordinarily performs ministerial functions Agent – representation, discretionary powers 3. Independent contract – only for a piece of work, undertakes to accomplish certain result according to his own method XPT the result Agent – subject to control and discretion of the principal 4. Partnership – also acts as principal 5. Negotiorium Gestio – not only w/o the authority of owner but is w/o his knowledge (quasi-contract) Agent – expressly conferred 6. Brokerage – acts as mere intermediary b/w seller – buyer Agent – object placed in his possession and at his disposal 7. Sale – agency to sell is different from agency to sale ART. 1869 – Kinds of Agency (express – implied) 1. Manner of its creation a. Express – agent has been actually authorized by the principal orally or in writing b. Implied – implied from the acts of P from his silence or lack of action OR his failure to reject the agency knowing that another person is

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acting on his behalf w/o authority OR acts of agent which carry out the agency, OR from his silence or inaction. An implied agency is an actual agency as much as an express agency As to its character a. Gratuitous – agent receives no compensation for his services b. Compensated or Onerous – agent receives compensation As to extent of business covered a. General – comprises all the businesses of the principal b. Special – comprises one or more specific transactions As to authority conferred a. Couched in general terms – deemed to comprise only acts of administration b. Couched in specific terms – authorizing only the performance of specific acts As to its nature and effects a. Ostensible or Representative – agent acts in the name and representation of P b. Simple or Commission – agent acts for the account of P but in his own name

Form of Agency - in general, no formal requirements on appointing of agent - agents authority may be oral or written - instance when law requires specific form of agency is ART. 1874 - agency may be implied (ART. 1869) ART. 1870 – Acceptance by agent - may also be express or implied w/c carry out the agency OR from his silence or inaction

Form of acceptance by agent - agency is a contract, there must be a consent - express or implied ART. 1871 – Implied acceptance - acceptance may be implied if P delivers his power of attorney to agent and latter doesn’t object Acceptance b/w persons present - implied acceptance by agent, the law distinguishes between cases like: 1. persons are present 2. persons are absent - agency is impliedly accepted if agent receives power of attorney from P himself personally w/o objection - presumption of acceptance may be rebutted by contrary proof - power of attorney is a written authorization to an agent to perform specified acts in behalf of his principal which acts, when performed, shall have binding effect on P ART. 1872 – When acceptance cannot be implied from silence of agent, except 1. P transmits his power of attorney to agent, who receives w/o objection 2. P entrusts to him by letter or telegram a power of attorney w/ respect to the business in w/c he is habitually engaged as an agent and he did not reply Acceptance b/w persons absent - If both P and A are absent, acceptance by the agent is not implied from his silence/inaction - Since agent is not bound to accept, he can ignore the offer - In those 2 cases, acceptance is implied - When he begins to act under the authority conferred upon him - Note:

1. 1871 – P personally delivers power of attorney to A 2. 1872 – P transmits power of attorney to A ART. 1873 – P informs another OR by public advertisement that he has giver power of attorney. Power shall continue to be in full force until notice is rescind in the same manner in w/c it was given Communication of existence of agency - 2 ways of giving notice w/ diff effects 1. Special information – agent appointed is considered such w/ respect to the person to whom it was given 2. Public advertisement – agent is considered as such with regard to any person e.g. newspaper, radio, posters, billboards - In either use, agency is deemed to exist won there’s actually an agency Manner of revocation of agency - Power of attorney must be revoked in the same manner in which it was given - 3rd parties must be given notice - Revocation made in any manner is effective where the person dealing with the agent has actual knowledge thereof; otherwise, bad faith and fraud would be committed ART. 1874 – Sale of a piece of land or any interest therein is through an agent, authority of latter shall be in writing; otherwise sale shall be VOID Sale of land through agent - Sale of a piece of land or any interest thereon like usufruct, mortgage etc. is void UNLESS authority of the agent is in writing - Letter containing the authority to sell is sufficient

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Note: ART. 1874 speaks only of an agency for “sale of a piece of land or any interest therein”

ART. 1875 – Agency is presumed to be for a compensation unless there is proof to the contrary Presumption as to compensation of agent - P must pay A the compensation agreed upon, OR the reasonable value of A’s services if no compensation was specified - Agent should’ve complied w/ his obligations - Circumstance that A was for compensation or not shall be considered by court in determining the extent of liability of A for fraud/negligence - Presumption that A is for compensation may be contradicted by evidence.