an action or to abandon a prescription already

AGENCY REVIEWER acquired;

 (4) To waive any obligation gratuitously;
Art. 1877. An agency couched in general terms  (5) To enter into any contract by which the
comprises only acts of administration, even if the ownership of an immovable is transmitted or
principal should state that he withholds no power or acquired either gratuitously or for a valuable
that the agent may execute such acts as he may consideration;
consider appropriate, or even though the agency  (6) To make gifts, except customary ones for
should authorize a general and unlimited charity or those made to employees in the
management. business managed by the agent;
 (7) To loan or borrow money, unless the latter
Art. 1877 (Scope of General Agency) act be urgent and indispensable for the
preservation of the things which are under
Explanation: An agency granted in general terms is administration;
limited to acts of administration, even if the  (8) To lease any real property to another person
principal states that no power is withheld or grants for more than one year;
the agent general and unlimited management. This  (9) To bind the principal to render some service
prevents an agent from engaging in acts that alter or without compensation;
dispose of the principal’s property without explicit  (10) To bind the principal in a contract of
authority. partnership;
 (11) To obligate the principal as a guarantor or
Detailed Example: An agent is granted general
surety;
power to manage a business, but this authority does
 (12) To create or convey real rights over
not include selling the business’s assets or taking on
immovable property;
loans unless specifically authorized.
 (13) To accept or repudiate an inheritance;
 (14) To ratify or recognize obligations
Comparison:
contracted before the agency;
• Unlike Art. 1876, which establishes the  (15) Any other act of strict dominion. (n)
concept of general and special agencies, this article
Art. 1878 (Special Powers of Attorney)
clarifies that general authority does not
automatically extend to all types of actions.
Explanation: Certain acts require a special power
of attorney to ensure the agent has explicit authority
• Art. 1878 highlights actions that require
to undertake significant decisions on behalf of the
special powers, reinforcing the idea that general
principal. These include acts such as making
powers are inherently limited.
payments that go beyond routine transactions,
compromising on disputes, entering certain
contracts, making gifts, or creating real property
Art. 1878. Special powers of attorney are necessary rights.
in the following cases:
Detailed Example: • An agent needs a special
 (1) To make such payments as are not usually power of attorney to sell a house owned by the
considered as acts of administration; principal, as this is a transfer of ownership of
 (2) To effect novations which put an end to immovable property.
obligations already in existence at the time the
agency was constituted; • An agent needs special authority to
 (3) To compromise, to submit questions to compromise or settle a legal case involving the
arbitration, to renounce the right to appeal from principal.
a judgment, to waive objections to the venue of
Comparison: arbitration. Each of these actions involves distinct
legal considerations, with arbitration requiring
• Compared to Art. 1877, which limits explicit consent.
general powers to acts of administration, this article
lists specific cases where special authority must be Detailed Example: An agent authorized to settle a
granted for the agent to act. debt dispute cannot bind the principal to an
arbitration proceeding without specific
• This article is contrasted with Art. 1876 in authorization to do so.
defining specific scenarios where a special agency
is indispensable. Comparison:

• This is a refinement of Art. 1878, focusing

specifically on the limitations of a
Art. 1879. A special power to sell excludes the compromise-related power.
power to mortgage; and a special power to
mortgage does not include the power to sell. • Art. 1881 generally requires an agent to act
within their authority, while this article narrows
Art. 1879 (Limitations on Special Powers) down the specific limits on compromise
authority.Art. 1881. The agent must act within the
Explanation: A special power to sell does not imply scope of his authority. He may do such acts as may
the power to mortgage, and vice versa. This means be conducive to the accomplishment of the purpose
each power granted must be specifically defined to of the agency.
avoid overreach.

Detailed Example: If a principal grants an agent the

power to sell a piece of land, the agent cannot Art. 1882. The limits of the agent's authority shall
mortgage that land without additional, specific not be considered exceeded should it have been
authority. performed in a manner more advantageous to the
principal than that specified by him. (1715)
Comparison:
Art. 1882 (Advantageous Acts Beyond Authority)
• This article builds on Art. 1878 by
emphasizing how narrowly special powers must be Explanation: An agent’s act that exceeds their
construed, ensuring clear boundaries for the agent’s authority will not be considered a breach if it
actions. benefits the principal more than the originally
specified action.
• In comparison to Art. 1881, which deals
with staying within the scope of authority, this Detailed Example: A property agent authorized to
article addresses more specific aspects of authority negotiate a lease for a building finds a buyer
limitation. offering a highly advantageous purchase price,
which the agent secures, resulting in a significant
benefit to the principal.

Art. 1880. A special power to compromise does not Comparison:

authorize submission to arbitration.
• This article introduces flexibility compared
Art. 1880 (Compromise and Arbitration) to Art. 1881, which emphasizes staying within the
scope. Here, even exceeding authority may be
Explanation: A special power to compromise does permissible if beneficial.
not include the authority to submit issues to
 • Art. 1883 deals with situations where the the death of the principal, should delay entail any
agent acts independently and not in direct danger.
representation, contrasting with the principal-agent
focus here. Art. 1884

Art. 1883. If an agent acts in his own name, the Summary:

principal has no right of action against the persons Once an agent accepts the role, they must fulfill
with whom the agent has contracted; neither have their duties. If they fail, any resulting damage to the
such persons against the principal. principal (the person who appointed the agent) is
their responsibility. The agent must also complete
In such case the agent is the one directly bound in unfinished tasks even after the death of the
favor of the person with whom he has contracted, as principal if delays could cause harm.
if the transaction were his own, except when the
contract involves things belonging to the principal. Example: A lawyer (agent) agrees to represent a
client (principal) in a pending lawsuit. If the lawyer
The provisions of this article shall be understood to negligently fails to attend hearings and the client
be without prejudice to the actions between the loses, the lawyer is liable for the damages. If the
principal and agent. client dies before the case ends, the lawyer must
continue the legal work if neglecting it could
Art. 1883 (Agent Acting in Own Name)
endanger the client’s interests, like missing critical
deadlines.
Explanation: If an agent acts in their own name
without indicating their role as an agent, the
principal has no right of action against third parties
Art. 1885. In case a person declines an agency, he is
involved in the transaction. The agent becomes
bound to observe the diligence of a good father of a
personally liable unless the contract pertains to the
family in the custody and preservation of the goods
principal’s property.
forwarded to him by the owner until the latter
should appoint an agent or take charge of the goods.
Detailed Example: If an agent purchases supplies
(n)
under their own name for a principal’s business, the
supplier may only pursue the agent for
Art. 1885
non-payment, not the principal.
Summary: If someone declines to become an
agent but receives goods on behalf of the principal,
Comparison:
they must handle these goods with the care
• This article provides a stark contrast with
expected of a prudent parent until a replacement is
Art. 1881, where the agent acts within authorized
appointed.
capacity. Here, the focus is on what happens when
the agent acts independently.
Example: A businessperson sends products to a
• Unlike Art. 1882, which involves
distributor, expecting them to sell on their behalf. If
exceeding authority but with potential benefits, this
the distributor refuses the role but keeps the goods
deals with actions that separate the agent’s and
temporarily, they must protect and store the items
principal’s interests.
properly until the businessperson finds another
agent.

Art. 1884. The agent is bound by his acceptance to

Comparison to Art. 1884:
carry out the agency, and is liable for the damages
Art. 1884 deals with obligations of accepted agents,
which, through his non-performance, the principal
while Art. 1885 focuses on the responsibilities of
may suffer.
individuals who refuse the agency but are in
He must also finish the business already begun on
possession of the principal’s property.
Art. 1886. Should there be a stipulation that the Detailed Example: A property manager is
agent shall advance the necessary funds, he shall be instructed by the principal to renovate a building
bound to do so except when the principal is using eco-friendly materials. If the principal gives
insolvent. no specific guidance for other properties, the
manager must still act prudently and ensure any
Art. 1886 (Agent’s Financial Obligation) renovations align with industry standards and the
principal’s interests.
Explanation: When an agent agrees to advance
necessary funds for carrying out an agency, they Comparison:
must provide those funds, except when the principal • Compared to Art. 1888, which requires an
becomes insolvent (i.e., unable to repay). agent to avoid actions that cause loss, Art. 1887
emphasizes faithfully executing duties or using
Detailed Example: A travel agent is tasked with discretion when no instructions are provided.
organizing a company’s trip, including making • Art. 1885 also uses the “good father of a
down payments for hotels and flights. If the family” standard, but it applies to those who decline
company is solvent, the agent must advance the the agency, not those who accept it.
funds as agreed. However, if the company becomes
insolvent, the agent is not obligated to continue
financing the trip.
Art. 1888. An agent shall not carry out an agency if
Comparison: its execution would manifestly result in loss or
• This article introduces a financial damage to the principal. (n)
obligation for agents, distinguishing it from Art.
1884, which generally focuses on performance of Art. 1888 (Avoiding Loss to the Principal)
duties, and Art. 1887, which concerns following
instructions. Explanation: Agents must not carry out actions that
• Compared to Art. 1891, which deals with would clearly harm the principal’s interests, even if
the accountability of funds and other assets received, the agency requires performance of such acts.
Art. 1886 focuses on the agent’s commitment to
advance funds. Detailed Example: An insurance agent discovers
that an investment recommended by the principal is
likely to lead to financial losses. The agent must not
proceed with the investment, as executing the
Art. 1887. In the execution of the agency, the agent instruction would cause obvious harm.
shall act in accordance with the instructions of the
principal. Comparison:
In default thereof, he shall do all that a good father • This provision complements Art. 1887,
of a family would do, as required by the nature of which emphasizes following instructions, by adding
the business. a duty to refrain from harmful actions. It shows the
balance between compliance and discretion.
Art. 1887 (Execution of Instructions) • Unlike Art. 1884, which holds agents liable
for non-performance, this article proactively
Explanation: This provision mandates that the prevents harm through agent discretion.
agent must act in accordance with the principal’s
instructions. When no instructions are given, the
agent is expected to use reasonable judgment and
act as a “good father of a family.” Art. 1889. The agent shall be liable for damages if,
there being a conflict between his interests and
those of the principal, he should prefer his own. (n)
 • Compared to Art. 1884, which deals with
Art. 1889 (Conflict of Interest) general agent duties, this article provides guidelines
for managing specific financial interactions.
Explanation: An agent who prioritizes their own
interests over the principal’s in cases of conflict will
be liable for any damages resulting from this Art. 1891. Every agent is bound to render an
conflict. account of his transactions and to deliver to the
principal whatever he may have received by virtue
Detailed Example: A real estate agent is of the agency, even though it may not be owing to
representing a principal in selling land but chooses the principal.
to buy the property themselves at a reduced price Every stipulation exempting the agent from the
without disclosing their interests, causing a loss for obligation to render an account shall be void.
the principal. This creates a conflict that results in (1720a)
liability.
Art. 1891 (Accountability)
Comparison:
• Art. 1889 addresses scenarios where the Explanation: Agents must account for and deliver
agent’s personal interest conflicts with the all items and funds received in connection with
principal’s interests, unlike Art. 1884, which their duties. Any agreement exempting them from
concerns general non-performance liability. this obligation is void.
• This article shares a common thread with
Art. 1890, which regulates potential conflicts in Detailed Example: A sales agent collects
borrowing and lending money as part of agency. payments from customers on behalf of a principal.
They must accurately report and hand over all
collected funds. Any agreement stating that the
agent does not need to account for the funds is
Art. 1890. If the agent has been empowered to legally void.
borrow money, he may himself be the lender at the
current rate of interest. If he has been authorized to Comparison:
lend money at interest, he cannot borrow it without • Art. 1886 involves financial matters but
the consent of the principal. (n) focuses on advancing funds, while Art. 1891
emphasizes accountability and transparency.
Art. 1890 (Borrowing and Lending) • Compared to Art. 1884, which generally
holds agents liable for non-performance, this article
Explanation: If authorized, an agent may lend is about ongoing accountability.
their own money to the principal at market rates but
cannot borrow the principal’s money unless
explicitly permitted. Art. 1892. The agent may appoint a substitute if the
principal has not prohibited him from doing so; but
Detailed Example: A company appoints an he shall be responsible for the acts of the substitute:
employee to manage corporate loans. The employee (1) When he was not given the power to appoint
can lend their own money to the company as long one;
as the interest rate is fair but must obtain approval (2) When he was given such power, but without
before borrowing from the corporate fund. designating the person, and the person appointed
was notoriously incompetent or insolvent.
Comparison: All acts of the substitute appointed against
• While Art. 1889 broadly covers conflicts of the prohibition of the principal shall be void.
interest, Art. 1890 specifically addresses conflicts in
financial dealings (borrowing/lending).
 Art. 1894. The responsibility of two or more agents,
Art. 1892 (Appointment of Substitutes) even though they have been appointed
simultaneously, is not solidary, if solidarity has not
Explanation: An agent may appoint a substitute been expressly stipulated.
unless explicitly forbidden. They are responsible for
the substitute’s actions if the appointment was
unauthorized or if the substitute is incompetent.
Art. 1894 (Non-Solidary Responsibility of Multiple
Detailed Example: A logistics agent delegates the Agents)
transportation of goods to a subcontractor without
approval. If the subcontractor mishandles the Explanation: When two or more agents are
shipment, the original agent bears responsibility. appointed together, they are only jointly responsible
if this has been explicitly agreed upon.
Comparison: Detailed Example:
• This provision builds on Art. 1884 by Two business consultants are hired to improve
considering scenarios of delegation and its company operations. If one consultant fails in their
liabilities, unlike the straightforward obligation to duties, the other is not automatically liable unless
perform in Art. 1884. solidary liability was agreed upon.
• Compared to Art. 1893, it clarifies the
circumstances in which the substitute’s acts might Comparison:
result in liability.
• Contrasts with Art. 1895, where solidary
liability is agreed, making each agent accountable
Art. 1893. In the cases mentioned in Nos. 1 and 2 of for others’ faults.
the preceding article, the principal may furthermore
bring an action against the substitute with respect to
the obligations which the latter has contracted under Art. 1895. If solidarity has been agreed upon, each
the substitution. of the agents is responsible for the non-fulfillment
of agency, and for the fault or negligence of his
Art. 1893 (Principal’s Action Against Substitutes) fellows agents, except in the latter case when the
fellow agents acted beyond the scope of their
Explanation: The principal may directly pursue authority. (n)
the substitute for any obligations or damages they
caused under the substitution. Art. 1895 (Solidary Responsibility)

Detailed Example: Continuing from the above Explanation:

example, the principal may sue the subcontractor If agents are solidarily liable, each is responsible for
for damages if they mishandled the goods during fulfilling obligations and covering the faults of their
transit. fellow agents, except when acts were beyond
authority.

Detailed Example:
Three accountants agree to be solidarily liable for
financial oversight. If one makes a grave error, the
others are responsible unless the error was outside
their scope.