Law on Agency

Long Quiz- September 06, 2019

JRMSU-College of Law

1. Jo-Ann asked her close friend, Aissa, to buy some groceries for her in the
supermarket. Was there a nominate contract entered into between Jo-Ann and
Aissa? In the affirmative, what was it? Explain.

2. A foreign manufacturer of computers and a Philippine distributor entered into a

contract whereby the distributor agreed to order 1,000 units of the manufacturer’s
computers every month and to resell them in the Philippines at the manufacturer’s
suggested prices plus 10%. All unsold units at the end of the year shall be bought
back by the manufacturer at the same price they were ordered. The manufacturer
shall hold the distributor free and harmless from any claim for defects in the units.
Is the agreement one for sale or agency?

3. Richard sold a large parcel of land in Cebu to Leo for P100 million payable in annual
installments over a period of ten years, but title will remain with Richard until the
purchase price is fully paid. To enable Leo to pay the price, Richard gave him a
power-of-attorney authorizing him to subdivide the land, sell the individual lots, and
deliver the proceeds to Richard, to be applied to the purchase price. Five years later,
Richard revoked the power of attorney and took over the sale of the subdivision lots
himself. Is the revocation valid or not? Why?

4. As an agent, AL was given a guarantee commission, in addition to his regular

commission, after he sold 20 units of refrigerators to a customer, HT Hotel. The
customer, however, failed to pay for the units sold. AL’s principal, DRBI, demanded
from AL payment for the customer’s accountability. AL objected, on the ground that
his job was only to sell and not to collect payment for units bought by the customer.

Is AL’s objection valid? Can DRBI collect from him or not? Reason.

5. CX executed a special power of attorney authorizing DY to secure a loan from any

bank and to mortgage his property covered by the owner’s certificate of title. In
securing a loan from MBank, DY did not specify that he was acting for CX in the
transaction with said bank.

Is CX liable for the bank loan? Why or why not? Justify your answer.

6. X appoints Y as his agent to sell his products in Cebu City. Can Y appoint a sub-
agent and if he does, what are the effects of such appointment?

7. A as principal appointed B as his agent granting him general and unlimited

management over A’s properties, stating that A withholds no power from B and
that the agent may execute such acts as he may consider appropriate.

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 Accordingly, B leased A’s parcel of land in Manila to C for four (4) years at
P60,000.00 per year, payable annually in advance.

B leased another parcel of land of A in Caloocan City to D without a fixed term at

P3,000.00 per month payable monthly.

B sold to E a third parcel of land belonging to A located in Quezon City for three (3)
times the price that was listed in the inventory by A to B.

All those contracts were executed by B while A was confined due to illness in
the Makati Medical Center. Rule on the validity and binding effect of each of the
above contracts upon A the principal. Explain your answers.

8. Prime Realty Corporation appointed Nestor the exclusive agent in the sale of lots of
its newly developed subdivision. Prime Realty told Nestor that he could not collect
or receive payments from the buyers. Nestor was able to sell ten lots to Jesus and to
collect the down payments for said lots. He did not turn over the collections to
Prime Realty. Who shall bear the loss for Nestor’s defalcation, Prime Realty or Jesus?

9. Stating briefly the thesis to support your answer to each of the following cases, will
the death – (c) of an agent end an agency?

-end-

“Cheating will not make you a lawyer.”

-Atty. Nizza P. Lesterio-Absin, CPA

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