Agency Study Guide Melicor (D2019)

Introduction to Agency (1) When the principal transmits his power of

attorney to the agent and the latter receives it
without any objection
WHAT IS AGENCY?
(2) When the principal entrusts to him by letter or
By a contract of agency a person binds himself to
telegram a power of attorney with respect to
do something or render some service in
the business in which he is habitually engaged
representation or on behalf of another, with the
as an agent, and he did not reply to the letter
consent or authority of the latter.
or telegram

It is a legal tie or relationship that may arise from

WHAT IS THE EFFECT OF CONSENT OR LACK
law, contract, quasi-contract, or estoppel. Through
THEREOF?
an agency, the agent by legal fiction becomes the
General rule on contracts
principal. The latter’s personality is extended
No one may contract in the name of another
through the facility of the agent, resulting to the
without being authorized by the latter, or unless he
ability of the principal to execute diverse juridical
has by law a right to represent him.
acts when physical presence is impossible or
inadvisable.
A contract entered into in the name of another by
one who has no authority or legal representation or
The elements of a contract of agency (Rallos vs.
who has acted beyond his powers, shall be
Felix Go Chan) are:
unenforceable, unless it is ratified expressly or
(1) Consent of the principal and of the agent
impliedly, by the person whose behalf it has been
(2) Object which is the execution of a juridical act
executed, before it is revoked by the other
in relation to third persons
contracting party.
(3) Agent acts on behalf of the principal and not
for himself
The ff. contracts are unenforceable unless ratified:
(4) Agent acts within the scope of his authority
Those entered into in the name of another person
by one who has been given no authority or legal
HOW IS CONSENT GIVEN?
representation, or who has acted beyond his
powers.
Principal
Agency may be express, or implied from the acts
With consent.
of the principal, his silence or lack of action, or his
The principal must comply with all the obligation
failure to repudiate the agency knowing that
which the agent may have contracted within the
another person is acting on his behalf without
scope of his authority.
authority.
Without consent but ratified
A third person cannot set up the fact that the
Agent
agent has exceeded his powers if the principal has
Acceptance by the agent may also be express, or
ratified or signified his willingness to ratify the
implied from the acts which carry out the agency,
contract.
or his silence or inaction according to the
circumstances.
Without consent
If the agent contracts in the name of the principal,
Between persons who are present, acceptance of
exceeding the scope of his authority, and the
the agency may also be implied if the principal
principal does not ratify the contract, it shall be
delivers his power of attorney to the agent, and
void if the party with whom the agent is aware of
the latter receives it without any objection.
the the limits of the power granted by the
principal. In such case, the agent shall be liable if
Between persons who are absent, acceptance of
he undertook to secure the principal’s ratification.
the agency cannot be implied from the silence of
the agent except:

1 of 11
Agency Study Guide Melicor (D2019)

WHAT IS RATIFICATION?
Ratification is the adoption or affirmance by a
person of an act that was done on his behalf
without his authority. It gives the act the effect as WHO HAS THE OBLIGATION TO DETERMINE
though it was originally authorized by him. THE EXISTENCE AND SCOPE OF THE AGENCY?
The third person dealing with the purported agent.
Requisites: (C-F-E-R-B) He is expected to exercise reasonable diligence.
(1) Principal must have capacity to ratify
(2) Principal must have knowledge or had reason Keeler Rules: (Keeler Electric vs. Rodriguez) 

to know of material or essential facts of the (P-E-E-G-S)
transaction (1) The law indulges in no bare presumptions that
(3) Principal must ratify act in its entirety an agency exists. It must be proven or
(4) Act must be capable of ratification presumed from facts
(5) Act was done on behalf of the principal (2) Agent cannot establish his own authority, either
by his own representations or assuming to
WHAT IS THE OBJECT OF A CONTRACT OF exercise it
AGENCY? (3) An authority cannot be established by mere
The execution of a juridical act in relation to third rumor or general reputation
persons (4) A general authority is not an unlimited one
(5) Every authority must ultimately find its source
WHAT IS THE RULE AS TO THE in an act or omission of the principal
CONSIDERATION IN A CONTRACT OF
AGENCY? HOW IS AGENCY DISTINGUISHED FROM THE
Agency is presumed to be for a compensation, FF:
unless there is proof to the contrary
Master-Servant Relationship
WHO ARE THE PARTIES TO A CONTRACT OF This involves household help who perform
AGENCY? DO THEY HAVE TO HAVE CAPACITY? household chores. They have no authority to
(1) Principal - one who is being represented represent the principal they also have no power to
(2) Agent - one who acts for and represents bind the latter.
another
Employer-Employee
Both must have capacity to contract to enter into a Four-Fold Test. There is no representation, but only
contract of agency. However, in execution of the performance of the duty on has been hired to do.
object of the agency, it is the principal who needs The basis is employment instead of representation.
to have the capacity, since the agent derives his
capacity from the principal. Lease of Service
Hired to perform acts that require technical
WHAT IS THE FORM OF A CONTRACT OF knowledge that another is not able to do. (i.e.
AGENCY? make a website; program an office software). There
Agency may be oral unless the law requires a is no representation, but a performance of a
specific form. service.

When a sale of a piece of land or any interest Independent Contractor

therein is made through an agent, the authority of Not subject to the control of the one who
the latter should be in writing otherwise the sale contracted the service. Only minimal supervision
shall be void. and control as to the result and the end-product of
the work. Employer will not be liable for torts.

Trust
Title and control of object passes to the trustee
who acts in his own name. (Not a representation).
2 of 11
Agency Study Guide Melicor (D2019)

May not be revoked anytime, and may be Classifications of Agency

terminated only by fulfilment of its purpose.

HOW ARE THE DIFFERENT CLASSIFICATIONS

Sale
GROUPED?
Buyer receives the goods as owner (not as
(1) As to manner consent is given (or not given)
property of principal). Title passes on the buyer
(a) express
and he pays the price (while agent is meant to
(b) implied
deliver the proceeds back to the principal). Buyer is
(c) agency by estoppel
able to return goods sold and may dispose of the
(d) agency by operation of law
thing as he pleases.
(2) As to extent of the business covered
(a) universal agency
Partnership
(b) general agency
Agent acts for the principal, while partner acts for
(c) special agency
himself and his other co-partners. (Partner binds
(3) As to what acts may be executed
himself as well). There is agreed sharing of profit
(a) agency couched in general terms
instead of mere compensation in a contract of
(b) agency couched in special terms
agency.
(4) As to durability - durable agency

Negetorium-Gestio
WHAT IS THE CLASSIFICATION AS TO MANNER
Representation is without authority and consent of
CONSENT IS GIVEN?
the owner. Arises from quasi-contract, instead of
contract. While an agent acts according to a
Express Agency vs. Implied Agency
principal’s express will, in this case diligence of a
Agency may be express, or implied from the acts
good father of a family is sufficient.
of the principal, from his silence or lack of action,
or his failure to repudiate the agency knowing that
Judicial Administrator
another is acting on his behalf without authority.
Agent is answerable only to the principal, while
J.A. is appointed by the court, heirs, and credit.
Agency by Estoppel
J.A. has to file a bond. Agency control is by
Estoppel is a bar which precludes a person from
agreement, while J.A. acts are subject to provisions
asserting anything contrary to that which has been
of the law. 

established as truth by his own acts or
representations, which were relied upon by third
persons.

(1) So far as third persons are concerned an act is

deemed to have been performed within the
scope of the agent’s authority if it is in the
terms of the power of attorney as written, even
if the agent has in fact exceeded the limits of
his authority according to an understanding
between the principal and the agent

(2) Even if the agent has exceeded his authority,

the principal shall be solidarily liable with the
agent, if the former allowed the latter to act as
though he had full powers.

(3) If the agency has been entrusted for the

purpose of contracting with specified persons,
its revocation shall not prejudice the latter if
they were not given notice thereof 


3 of 11
Agency Study Guide Melicor (D2019)


 *An agency couched in specific terms (with a

If the agent had general powers, revocation of special power of attorney) is needed to perform
the agency shall not prejudice third persons acts of strict dominion.
who acted in good faith and without
knowledge of the revocation. Publication of the Special powers of attorney are necessary in the ff.
notice of the revocation in a newspaper of cases: P-N-C-W-I G-L-L-S-P G-I-I-R-O
general circulation is a sufficient warning to
third persons. P-N-C-W-I
(1) To make such payments as are not usually
Agency by Operation of Law considered acts of administration
(1) The agent must finish the business already (2) To effect novations which put an end to the
begun on the death of the principal should obligations already in existence at the time the
delay entail any danger agency was constituted
(3) To compromise, to submit questions to
(2) The agency shall remain in full force and effect arbitration, to renounce the right to appeal
even after the death of the principal if it has from a judgement, to waive objections to the
been constituted in the interest of the latter venue of an action or to abandon prescription
and of the agent, or in the interest of a third already acquired
person who has accepted the stipulation in his (4) To waive any obligation gratuitously
favor (5) To enter into any contract by which an
ownership of an immovable is transmitted or
(3) Anything done by the agent without the acquired either gratuitously or for a valuable
knowledge and death of the principal, or of any consideration
other cause which extinguishes the agency, G-L-L-S-P
shall be valid and fully effective with respect to (6) To make gifts, except customary ones for
third persons who may have contracted with charity or those made to employees in the
him in good faith. business managed by the agent
(7) To loan or borrow money unless the latter act
WHAT IS THE CLASSIFICATION AS TO THE be urgent and indispensable for preservation of
EXTENT OF THE BUSINESS COVERED? the things which are under administration
An agency is either general or special. The former (8) To lease any real property to another person
comprises all the business of the principal. The for more than one year
latter, one or more specific transactions. (9) To bind the principal to render some service
without compensation
Universal agency - one which covers all the acts (10)To bind the principal in a contract of
which the principal may do partnership
General Agency - one which covers all the G-I-I-R-O
transactions of the business of a principal, or of the (11)To obligate the principal as a guarantor or
business of a particular kind or in a particular case surety
Special Agency - one which covers one or more (12)To create or convey real rights over immovable
specific transactions. property
(13)To accept or repudiate an inheritance
WHAT IS THE CLASSIFICATION AS TO WHAT (14)To ratify or recognize obligations contracted
ACTS MAY BE EXECUTED? before the agency
An agency couched in general terms comprises (15)Any other act of strict dominion
only acts of administration, even if the principal
should state that he withholds no power, or that A special power to sell excludes the power to
the agent may execute such acts as he may mortgage; and a special power to mortgage does
consider appropriate, or even though the agency not include the power to sell
should authorize a general and unlimited
management. A special power to compromise does not authorize
submission to arbitration.
4 of 11
Agency Study Guide Melicor (D2019)

Obligations and Liabilities of
 The agent may withdraw from the agency by
giving due notice to the principal. If the latter
Agents —> Principal
should suffer and any damage by reason of the
withdrawal, the agent shall indemnify him therefor,
WHAT ARE THE OBLIGATIONS? unless the agent should base his withdrawal on the
(1) Act within the scope of authority impossibility of continuing the performance of the
(2) To carry out the agency agency without grave detriment to himself.
(3) Not to carry out the agency
(4) Loyalty The agent, even if he should withdraw from the
(5) Diligence agency for a valid reason, must continue to act
until the principal has had reasonable opportunity
WHAT ARE THE LIABILITIES? to take the necessary steps to meet the situation.
(6) Account/Deliver
(7) Solidary Liability NOT TO CARRY OUT AGENCY
(8) Pay Interest The agent shall not carry out an agency if its
(9) Fraud/Negligence execution would manifestly result in loss or
damage to the principal.
ACT WITHIN THE SCOPE OF AUTHORITY
The agent must act within the scope of his LOYALTY
authority. he may do such acts as may be The agent shall be liable for damages, if there
conducive to the accomplishment of the purpose being a conflict between his interest and those of
of the agency. the principal, he should prefer his own.

The limits of the agent’s authority shall not be If the agent has been empowered to borrow
considered to have been exceeded, should it have money, he may himself be the lender at the current
been performed in a manner more advantageous rate of interest. If he has been authorized to lend
to the principal than that specified by him. money at interest, he cannot borrow it without the
consent of the principal.
In the execution of the agency, the agent shall act
in accordance with the instructions of the principal. The ff. persons cannot acquire by purchase, even
In default thereof, he shall do all that a good father at public or judicial auction, either in person or
of a family would do, as required by the nature of through mediation of another:
the business. (2) Agents, the property whose administration or
sale may have been instructed to them, unless the
What are instructions? consent of the principal has been given.

Specific Instances DILIGENCE

A special power to sell excludes the power to In case a person declines an agency, he is bound
mortgage and a special power to mortgage does to observe the diligence of a good father of a
not include the power to sell family in the custody and preservation of the
goods forwarded to him by the owner until the
A special power to compromise does not authorize latter should appoint an agent or take charge of
submission to arbitration. the goods.

CARRY OUT THE AGENCY In the execution of the agency, the agent shall act
The agent is bound by his acceptance to carry out in accordance with the instructions of the principal.
the agency and is liable for the damages, which In default thereof, he shall do all that a good father
through his non-performance the principal may of a family would do, as required by the nature of
suffer. the business.
He must also finish the business already begun on
the death of the principal, should delay entail any The agent is responsible not only for fraud but also
danger. for negligence, which shall be judged with more or
5 of 11
Agency Study Guide Melicor (D2019)

less rigour by the courts, according to whether the and designate the merchandise respectively
agency was or was not for compensation. belonging to each principal

ACCOUNT/DELIVER (2) Selling on credit

The agent is bound to render an account of his
transactions, and to deliver to the principal The commission agent cannot, without the express
whatever he may have received by virtue of the or implied consent of the principal sell on credit.
agency, even though they may not be owing to the Should he do so, the principal may demand from
principal. him payment in cash but the commission agent
shall be entitled to any interest or benefit, which
Every stipulation exempting the agent from the may result from such sale.
obligation to render an account shall be void.
Should the commission agent, with authority of the
SOLIDARY LIABILITY principal sell on credit he shall so inform the
The responsibility of two or more agents, even principal with the statement of the names of the
though they may have been appointed buyers. Should he fail to do so, the sale shall be
simultaneously is not solidary, if solidarity has not deemed to have been made for cash insofar as the
been expressly stipulated. principal is concerned.

If solidarity has been agreed upon, each of the (3) Payment/Collection of proceeds
agents shall be liable for the nonfulfillment of the
agency, and for the fault or negligence of his fellow Should the commission agent receive on sale, in
agents, except in the latter case when the fellow addition to ordinary commission, another called a
acted beyond the scope of his authority. guarantee commission, he shall bear the risk of
collection and shall pay the principal the proceeds
PAY INTEREST of the sale on the same terms agreed upon by the
The agent owes interest on the sums he has purchaser.
applied to his own use from the day on which he
did so, and on those he still owes after the The commission agent who does not collect the
extinguishment of the agency. credits of his principal at the time when they
become due and demandable shall be liable for
FRAUD/NEGLIGENCE damages unless he proves that he exercised due
The agent is responsible not only for fraud but also diligence for that purpose.
for negligence, which shall be judged with more or
less rigour by the courts, according to whether the WHAT IS THE AGENTS RESPONSIBILITY FOR
agency was or was not for compensation. ACTS OF SUBSTITUTES?

WHAT ARE THE SPECIFIC OBLIGATIONS OF The agent may appoint a substitute if the principal
COMMISSION AGENTS? has nor prohibited him from doing so; but he shall
be responsible for the acts of the substitute:
(1) Responsibility over goods (1) When he was not given the power to appoint
one
The commission agent shall be responsible for the (2) When he was given such power, but without
goods received by him in the terms and conditions designating the person, and the person
of the consignment, unless upon receiving them he appointed was notoriously incompetent or
should make a written statement of the damage insolvent.
and deterioration suffered by the same. All acts of the substitute appointed against the
prohibition of the principal shall be void.
The commission agent which handles goods of the
same kind and mark, which belong to different In cases mentioned in Nos. 1 and 2 of the
owners, shall distinguish them by countermarks, preceding article, the principal may furthermore
bring an action against the substitute with respect
6 of 11
Agency Study Guide Melicor (D2019)

to obligation which the latter has contracted under

the substitution. (3) When he acts beyond the scope of his
authority without notice
Obligations and Liabilities of

Agents —> 3rd parties An agent who acts as such is not personally liable
to the party with whom he contracts, unless he
expressly binds himself or exceeds the limits of his
WHEN AGENT ACTS WITHIN THE SCOPE OF
authority without giving such party sufficient notice
HIS AUTHORITY
of his powers.

GR: The agent is not liable to third parties

Exception to the exception: ratification
A third person cannot set up the fact that the
An agent who acts as such is not personally liable
agent has exceeded the scope of his powers, if the
to the party with whom he contracts, unless he
principal has ratified or signified his willingness to
expressly binds himself or exceeds the limits of his
ratify the agent’s acts.
authority without giving such party sufficient notice
of his powers.
(4) When he acts beyond the scope of his
authority with notice but he undertook to
If a duly authorized agent acts in accordance with
secure the principal’s ratification
the orders of the principal, the latter cannot set up
the ignorance of the agent as to circumstances
If the agent contracts in the name of another,
whereof he himself was, or ought to have been
exceeding the scope of his authority, and the
aware.
principal does not ratify the contract, it shall be
void if the party with whom the agent has
contracted with was aware of the limits of the
Ex:
powers granted by the principal. In such case, the
(1) When he expressly binds himself (P+A)
agent shall be liable if he undertook to secure the
principal’s ratification.
An agent who acts as such is not personally liable
to the party with whom he contracts, unless he
Requisites:
expressly binds himself or exceeds the limits of his
authority without giving such party sufficient notice
(5) Agency by estoppel (P+A)
of his powers.

Even when the agent has exceeded his authority,

(2) When he acts in his own name
the principal is solidarily liable with the agent if the
former allowed the latter to act as though he had
If an agent acts in his own name, the principal shall
full powers
have no right of action against the party with
whom the agent has contracted; neither have such
(6) torts/crimes (not under the principal’s
persons against the contract.
instructions)

In such case, the agent is the one directly bound in

favor of the person with whom he has contracted
as if the transaction were his own, except if the
contract involves things belonging to the principal

The provisions of this article shall be understood to

be without prejudice to the actions between the
principal and the agent.

*Exception to the exception: if he acted in his own

name without authority

7 of 11
Agency Study Guide Melicor (D2019)

Obligations of
 (3) Solidary Liability

If two or more persons have appointed an agent
Principals —> Agents
for a common transaction or undertaking, they
shall be solidarily liable to the agent for all the
WHAT ARE THE OBLIGATIONS? consequences of the agency.
(1) Advance/Reimburse
(4) Compensation
The principal must advance to the agent, should
the latter so request, the sums necessary for the Agency is presumed to be for compensation,
execution of the agency. unless there is proof to the contrary.

Should the agent have advanced them, the (5) Agent’s Lien
principal must reimburse him therefor, even if the
business or undertaking was not successful, The agent may retain in pledge the things which
provided the agent is free form all fault. are the object of the agency until the principal
effects the reimbursement and pays the indemnity
The reimbursement shall include interest on the set forth in the two proceeding articles
sums advanced, from the day on which the
advance was made. 


When principal not liable

The principal is not liable for the expenses incurred

by the agent in the ff. cases:
(1) If the agent acted in contravention of the tenor
of the principal’s instructions, 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 unfavourable 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 a certain sum

Agent’s Lien

The agent may retain in pledge the things which

are the object of the agency until the principal
effects the reimbursement and pays the indemnity
set forth in the two proceeding articles

(2) Indemnify

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.

8 of 11
Agency Study Guide Melicor (D2019)

Obligations of 
 (2) Thing contracted to two different persons

Principals —> Third Parties

When two persons contract with regard to the
same thing, one of with the agent and the other
GR: Principal is Liable to Third Parties when with the principal, and the two contracts re
Agent acts in his behalf and within the scope of incompatible with each other, that of the prior date
his authority shall be preferred without prejudice to the
—————————————————————— provisions of Art 1544.
If an agent acts in his own name, the principal has
no right of action against the persons with whom In the case referred to in Art 1916, if the agent has
the agent has contracted; neither have such acted in good faith, the principal shall be liable in
persons against the principal. damages to the the person whose contract must
be rejected. If the agent acted in bad faith, he
In such case, the agent is the one directly bound in alone shall be responsible.
favour of the person with whom he has contracted,
as if the transaction were his own, except when the Duty of third person

contract involves things belonging to the principal.
dealing with Agent
The provisions of this article shall be understood to
be without prejudice to the actions between the A third person with whom the agent wishes to
principal and agent. contract on behalf of the principal may require the
—————————————————————— presentation of the power of attorney, or the
The principal must comply with all the obligations instructions as regard the agency. Private or secret
which the agent may have contracted within the orders and instructions of the principal do not
scope of his authority. prejudice third persons who have relied upon the
—————————————————————— power of attorney or instructions shown them.
In the case referred to in Art 1916, if the agent has
acted in good faith, the principal shall be liable in Keeler Rules: (Keeler Electric vs. Rodriguez) 

damages to the the person whose contract must (P-E-E-G-S)
be rejected. If the agent acted in bad faith, he (1) The law indulges in no bare presumptions that
alone shall be responsible. an agency exists. It must be proven or
presumed from facts
Principal NOT liable: (2) Agent cannot establish his own authority, either
Agent acting outside the scope of his authority by his own representations or assuming to
exercise it
(see Agent to third party provisions) (3) An authority cannot be established by mere
rumor or general reputation
Ex to the Ex: (Principal liable) (4) A general authority is not an unlimited one
(1) Estoppel (5) Every authority must ultimately find its source
So far So far as third persons are concerned an act in an act or omission of the principal
is deemed to have been performed within the
scope of the agent’s authority if it is in the terms of
the power of attorney as written, even if the agent
has in fact exceeded the limits of his authority
according to an understanding between the
principal and the agent

Even if the agent has exceeded his authority, the

principal shall be solidarily liable with the agent, if
the former allowed the latter to act as though he
had full powers.

9 of 11
Agency Study Guide Melicor (D2019)

Extinguishment of the Agency revocation in a newspaper of general circulation is

a sufficient warning to third persons.
WAYS TO EXTINGUISH AGENCY
Agency is extinguished: Implied Revocation
(1) by its revocation
(2) by the withdrawal of the agent The appointment of a new agent for the same
(3) by the death, civil interdiction, insanity, or business or transaction revokes the previous
insolvency of the principal or of the agent agency from the day on which notice thereof was
(4) by the dissolution of the firm or corporation given to the former agent
which entrusted or accepted the agency
(5) by the accomplishment of the object or The agency is revoked if the principal directly
purpose of the agency manages the business entrusted to the agent,
(6) by the expiration of the period for which the dealing directly with third persons.
agency was constituted
A general power of attorney is revoked by a
REVOCATION special one granted another agent, as regards the
special matter involved in the latter.
The principal may revoke the agency at will, and
compel the agent to return the document When Agency may not be revoked?
evidencing the agency. Such revocation may be An agency cannot be revoked if a bilateral contract
express or implied. depends upon it, if it is the means of fulfilling an
obligation already contracted, or if a partner is
When two or more principal have granted a power appointed manager of a partnership in the contract
of attorney for a common transaction, any one of of partnership and his removal from management
them may revoke the same without the consent of is unjustifiable.
the others.
WITHDRAWAL
Effect of Revocation The agent may withdraw from the agency by
giving due notice to the principal. If the latter
If a person specially informs another or states by should suffer any damage by reason of the
public advertisement that he has given a power of withdrawal, the agent must indemnify him
attorney to a third person, the latter thereby therefore, unless the agent should base his
becomes a duly authorized agent, in the former withdrawal upon the impossibility of continuing
case with respect to the person who received the performance without grave detriment to himself.
special information, and in the latter case with
regard to any person. The agent even if he should withdraw from the
agency for a valid reason, must continue to act
The power shall continue to be in force until the until the principal has had reasonable opportunity
notice is rescinded in the same manner in which it to take the necessary steps to meet the situation.
was given.
——————————————————————- DEATH
If the agency has been entrusted for the purpose GR: death extinguishes agency
of contracting with specified persons, its
revocation shall not prejudice the latter if they were Exceptions:
not given notice thereof 
 The agency shall remain in full force and effect
——————————————————————-
 even after the death of the principal if it has been
If the agent had general powers, revocation of the constituted in the interest of the latter and of the
agency shall not prejudice third persons who acted agent, or in the interest of a third person who has
in good faith and without knowledge of the accepted the stipulation in his favor.
revocation. Publication of the notice of the
Anything done by the agent without the
knowledge of the death of the principal, or of any
10 of 11
Agency Study Guide Melicor (D2019)

other cause which extinguishes the agency is valid

and shall be fully effective with respect to third
persons who may have contracted with him in
good faith.

Duty of heirs of agent

If the agent dies, his heirs must notify the principal
thereof, and in the meantime adopt such measures
as the circumstances may demand in the interest of
the latter.

Other Modes of extinguishing agency

(1) Dissolution of the firm/corporation

(2) Accomplishment of the object/purpose

(3) Expiration of the period

(4) Civil Interdiction, Insanity, or insolvency

11 of 11