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    Chapter-Five: Agency Contract

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    alemayehu
    This document summarizes key aspects of agency contracts under civil law. It defines agency as a contract where an agent agrees to represent and perform acts on behalf of a principal. An agency contract requires consent, an object, and the principal's capacity but not the agent's. Agency can be created by law, contract, or to perform any lawful act for the principal. The duties of the agent include acting loyally and following instructions, while the principal must remunerate and indemnify the agent. An agency terminates if revoked, one party renounces, or upon certain events like death or bankruptcy.

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    Chapter-Five: Agency Contract

    Uploaded by

    alemayehu
    31 views10 pages
    This document summarizes key aspects of agency contracts under civil law. It defines agency as a contract where an agent agrees to represent and perform acts on behalf of a principal. An agency contract requires consent, an object, and the principal's capacity but not the agent's. Agency can be created by law, contract, or to perform any lawful act for the principal. The duties of the agent include acting loyally and following instructions, while the principal must remunerate and indemnify the agent. An agency terminates if revoked, one party renounces, or upon certain events like death or bankruptcy.

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    This document summarizes key aspects of agency contracts under civil law. It defines agency as a contract where an agent agrees to represent and perform acts on behalf of a principal. An agency contract requires consent, an object, and the principal's capacity but not the agent's. Agency can be created by law, contract, or to perform any lawful act for the principal. The duties of the agent include acting loyally and following instructions, while the principal must remunerate and indemnify the agent. An agency terminates if revoked, one party renounces, or upon certain events like death or bankruptcy.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    31 views10 pages

    Chapter-Five: Agency Contract

    Uploaded by

    alemayehu
    This document summarizes key aspects of agency contracts under civil law. It defines agency as a contract where an agent agrees to represent and perform acts on behalf of a principal. An agency contract requires consent, an object, and the principal's capacity but not the agent's. Agency can be created by law, contract, or to perform any lawful act for the principal. The duties of the agent include acting loyally and following instructions, while the principal must remunerate and indemnify the agent. An agency terminates if revoked, one party renounces, or upon certain events like death or bankruptcy.

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    © All Rights Reserved
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    of 10

    Chapter-Five: Agency Contract

    • 5.1. Agency Defined


    • Agency is a contract where by a person, the agent, agrees with
    another person, the principal, to represent him and to perform
    on his behalf one or several legally binding acts (Art. 2199, of
    the civil code).
    • Requirements of agency contract:
    • Consent of the principal and buyer;
    • Object of agency contract;
    • Capacity of the principal not of the agent; and
    • Form is not a requirement because parties can make expressly
    or impliedly.

    1
    Chapter-five…cont`d
    5.2. Sources of Agency
    1. Law
    Examples:
    • Guardians for incapable persons;
    • bodies corporate (Legal person);
    • Households or spouses;
    • unauthorized agency (agency of necessity); and
    • curator ship or representation by court authorization.
    2. Contract: Express or implied agreement of the parties.
    2
    Chapter-five…cont`d
    5.3. Scope of Agency
    • Agency may be created to perform almost any act
    which the principal can lawfully do.
    A. The object of the contract of agency must not be
    crime nor is contrary to public policy.
    B. Some acts must be performed in person and can’t
    be entrusted or delegated to an agent:
    • Concluding marriage;
    • voting right;
    • testifying in a court;
    3
    Chapter-five…cont`d
    • making a will are instances where personal action is
    required.
    • Forms of agency are:
    A. General agency-is agency expressed in general terms
    • Acts done for the preservation or maintenance of
    property;
    • lease for not exceeding three years;
    • the collection of debts;
    • the investment of income;
    • and the discharge of debts;
    4
    Chapter-five…cont`d
    • The sale of crops;
    • Goods intended to be sold or perishable commodities
    shall be deemed to be acts of management.
    B. Special agency-is said to be complete agency
    • alienate or mortgage real estate;
    • invest capital;
    • sign bills of exchange;
    • effect a settlement;
    • consent to arbitration;

    5
    Chapter-five…cont`d
    • make donations; or
    • bring or defend an action.
    5.4. Distinguishing the Duties of the Agent and the principal
    A. Duties of the Agent
    • Shall act with the strictest good faith towards his principal
    interest;
    • shall disclose to the principal any circumstance which would
    justify the revocation or variation of agency contract;
    • the duty to loyalty;
    • to perform the work which he has been appointed to do;

    6
    Chapter-five…cont`d
    • to follow instructions of a principal or custom or nature of the
    transactions;
    • to take reasonable care and skill;
    • to avoid a conflict of interest;
    • to remit sums received by him and all profits accruing to him
    in the courses of his employment;
    • to maintain accounts and reports;
    • not to delegate another agent; cannot further delegate the
    work or substitute, which has been delegated to him by his
    principal unless authorized by the principal to delegate or
    substitute another agent

    7
    Chapter-five…cont`d
    B. Duties of the Principal
    • to remunerate the agent;
    • to indemnity an agent against any loss; and
    • to release the agent’s liabilities which he incurred in the
    interest of the principal
    C. Liabilities of the agent and the principal
    • The principal is liable for the act done by the agent with
    in his power.
    • The agent is liable for the acts done beyond his power
    unless ratified by the principal.
    8
    Chapter-five…cont`d
    5.5. Termination of Agency
    • Grounds for termination of agency are:
    • When revocation or repudiation made by the principal;
    • When renunciation made by the agent;
    • Death of either parties or declared absence of either
    parties;
    • incapacity of an agent or a principal;
    • bankruptcy of an agent or a principal;
    • when there is lapse of time of the agency;
    • when the purpose of agency is achieved;
    9
    Chapter-five…cont`d
    • when there is occurrence of a specified event;
    • by mutual agreement of parties or unilateral
    termination of either party;
    • when agency relationship has impossibility;
    • when agency relationship has Illegality; and
    • when the subject matter of the agency has
    changed its circumstances.
     
    10

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