You are on page 1of 3

ART.

1884 (insert provision)



Under Article 1884 of the new civil code, when an agent accepts the appointment of
the principal, a contract of agency arises, and at the point the agent is legally bound to carry
out the terms of the agency; otherwise, if he fails or refuses to carry on the agency, he shall
be liable for damages suffered by the principal by reason of his non-performance.
The article emphasizes the principal that once the agent accepts the principals
appointment, the agent is bound to comply with his duty of diligence or care.
Despite the obligatory nature of every contract in agency, Art. 1884 emphasizes the
point that when an agent refuses to comply with his obligations, the remedy of the
principal is to sue him for damages, since an action for specific performance is not available
for personal obligations to do.
Although a contract of agency is terminated ipso juri upon the death of the
principal, nonetheless, Art. 1884, expressly provides that the agent must finish the business
already begun upon the death of the principal should delay entail any danger. The
obligatory force of the duty of the agent to act with diligence exceeds the formal
termination of the agency partnership, which automatically comes about by the death of
the principal.

----------------------------- INSERT CASE-----------------------------------

ART. 1885 (insert provision)

When a person declines the offer to make him an agent, generally no contract of
agency arises and thereby no obligation is assumed by such person to the offeror based on
the absence of privity. However, Art. 1885 provides for the exceptions.
In the event a person declines an agency, he is still bound to observe the diligence of
a good father of a family in the custody and preservation of the goods forwarded to him by
the owner. This rule is based on equity. The owner, however, must act as soon as
practicable either
(1) By appointing an agent: or
(2) By taking charge of the goods

----------------------------- INSERT CASE-----------------------------------

ART. 1886 (insert provision)
As a rule, the principal must advance to the agent, should the later so request, the
sums necessary for the execution of the agency. The contract of agency, however, may
stipulate that the agent shall advance the necessary funds. In such case, the agent is bound
to furnish such funds except when the principal is insolvent.
The exception is based on the principals obligation to reimburse the agent.
Incidentally, the insolvency of the principal is a ground for extinguishment of agency.

----------------------------- INSERT CASE-----------------------------------

ART. 1887 (insert provision)
Instructions are private directions which the principal may give the agent in regard
to the manner of performing his duties as such agent but of which a third party is ignorant.
They are said to be secret if the principal intended them not to be made known to such
party.
Article 1887 of the new Civil Code provides succinctly the twin measures of how an
agent should act in the execution of the agency, which ought to be as follows:
(1) Agent must act in accordance with the instructions of the principal:
(2) In default of guiding instructions, the agent shall do all that a good father of a
family would do, as required by the nature of the business.

----------------------------- INSERT CASE-----------------------------------




Art. 1888 (insert provision)

The agent, upon acceptance of the agency, is not bound in all cases to carry out the
agency in accordance with the instructions of the principal. Thus, the agent must not carry
out the agency if its execution would manifest result in loss or danger to the principal.
The reason for article 1888 is obvious. The duty of the agent who is merely an
extension of the personality of the principal is to render service for the benefit of the
principal and not to act to his detriment. Furthermore, an agent must exercise due diligence
in carrying out the agency

----------------------------- INSERT CASE-----------------------------------

Art. 1889

When an agent violates his duty of loyalty, as where in a conflict-of-interest
situation he prefers his own interest to the detriment of the principal. Agency being a
fiduciary relation, the agent is required to observe utmost good faith and loyalty towards
his principal. He must look after the principals interest as if they were his own. He is not
permitted without the knowledge and consent of the principal, to assume two distinct and
opposite characters in the same transaction, acting for himself and pretending to act for his
principal. He is prohibited from dealing in the agency matters on his own account and for
his own behalf without the consent of his principal, freely affect the transaction.
An agent, therefore, is liable for damages if, there being a conflict between his
interest and those of the principal, he should prefer his own. As the law does not
distinguish, the rule is the same whether the agency is onerous or gratuitous.

You might also like