contract of agency

Definition: 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. (Article 1868)

Characteristics:
1. consensual
2. nominate
3. preparatory
4. principal
5. unilateral; reciprocal (if for compensation)

Nature: Since it is a contract, there must be a meeting of the minds as to consent, object, and cause.

Basis: Representation. The acts of the agent on behalf of the principal within the scope of his authority produce the same legal and binding effects as if they were personally done by the principal. Hence, the distinguishing features of agency are its representative character & its derivative authority.

Purpose: extend the personality of the principal through the facility of the agent

Capacity of the Parties:
*** The principal may be a natural or a juridical person. And he must be capacitated. The rule is if a person is capacitated to act for himself or his own right, he can act through an agent.
*** As to the agent, insofar as the third persons are concerned, it is enough that the principal is capacitated. But insofar as his obligations to his principal are concerned, the agent must be able to bind himself.
Essential Elements:
1. consent of the parties to establish the relationship;
2. object of the contract is the execution of a juridical act in relation to third persons;
3. agent acts as a representative and not for himself; and
4. agent acts within the scope of his authority

Acts That Cannot Be Done By Agent
(1) Personal Acts
(2) Criminal or Illegal Acts
Nature of Relationship Between Principal & Agent: Fiduciary, based on trust & confidence