Group 3

Question 1

What is the essence of an agency relationship?
a) The agent acts on their own behalf
b) The agent acts as a representative of the principal
c) The agent takes full ownership of the principal’s business
d) The agent does not need the principal’s consent

Answer 1

b) The agent acts as a representative of the principal

Question 2

Which of the following is NOT a characteristic of a contract of agency?
a) Consensual
b) Unilateral in all cases
c) Nominate
d) Bilateral

Answer 2

b) Unilateral in all cases

Question 3

Which article of the Civil Code defines agency?
a) Article 1868
b) Article 1880
c) Article 1895
d) Article 1900

Answer 3

a) Article 1868

Question 4

What is the general rule regarding acts that may be delegated to an agent?
a) All acts may be delegated without restriction
b) Personal acts and acts prohibited by law cannot be delegated
c) Only business-related acts can be delegated
d) The agent can delegate acts without the principal’s consent

Answer 4

b) Personal acts and acts prohibited by law cannot be delegated

Question 5

What are the two general types of agency based on manner of creation?
a) Voluntary and involuntary agency
b) Express and implied agency
c) Gratuitous and compensated agency
d) General and special agency

Answer 5

b) Express and implied agency

Question 6

When is an agent liable for the acts of a sub-agent?
a) If the agent was not authorized to appoint a sub-agent
b) If the agent appointed a notoriously incompetent substitute
c) If the principal did not allow the substitution
d) All of the above

Answer 6

d) All of the above

Question 7

What is the meaning of “Qui facit per alium facit per se” in agency law?
a) He who acts through another, acts himself
b) The agent is independent from the principal
c) The agent must act in his own interest
d) An agent’s authority cannot be revoked

Answer 7

a) He who acts through another, acts himself

Question 8

What is required for a pledge to be enforceable against third parties?
a) A notarized contract
b) Registration in a public record
c) Delivery of the pledged item to the pledgee
d) Both b and c

Answer 8

d) Both b and c

Question 9

Under Article 1897, when is an agent personally liable to third parties?
a) When the agent acts within the scope of authority
b) When the agent exceeds their authority without notice
c) When the agent follows the principal’s instructions
d) When the agent contracts in the principal’s name

Answer 9

b) When the agent exceeds their authority without notice

Question 10

Under Article 1919, which of the following does NOT automatically extinguish an agency?
a) Revocation by the principal
b) Death of the principal or agent
c) Expiration of the agency period
d) The agent’s failure to perform

Answer 10

d) The agent’s failure to perform

Question 11

In a contract of pledge, who retains ownership of the pledged item?
a) The pledgee
b) The pledgor
c) The bank
d) The government

Answer 11

b) The pledgor

Question 12

What is the key difference between a real mortgage and a chattel mortgage?
a) A real mortgage involves movable property, while a chattel mortgage involves immovable property
b) A real mortgage involves immovable property, while a chattel mortgage involves movable property
c) A chattel mortgage does not require a contract
d) A real mortgage does not require registration

Answer 12

b) A real mortgage involves immovable property, while a chattel mortgage involves movable property

Question 13

Under Article 1908, when is a commission agent liable for damages?
a) When they fail to collect credits due and demandable
b) When they disclose the buyer’s name
c) When they sell goods at a higher price
d) When they return the goods to the principal

Answer 13

a) When they fail to collect credits due and demandable

Question 14

Which of the following extinguishes a mortgage?
a) Destruction of the mortgaged property
b) Sale of the mortgage to another lender
c) The debtor’s bankruptcy
d) The principal’s inability to pay

Answer 14

a) Destruction of the mortgaged property

Question 15

When does a guarantee commission make a commission agent liable?
a) When the buyer defaults on payment
b) When the goods are delivered late
c) When the agent does not make a written statement about damaged goods
d) When the principal refuses to acknowledge the sale

Answer 15

a) When the buyer defaults on payment

Question 16

What is the primary purpose of an agency?
a) To create a new legal entity
b) To extend the personality of the principal through an agent
c) To allow agents to act independently
d) To avoid liabilities in business transactions

Answer 16

b) To extend the personality of the principal through an agent

Question 17

Which of the following is NOT an element of a contract of agency?
a) Consent of the parties
b) A valid consideration
c) The agent acts as a representative
d) The agent acts within the scope of authority

Answer 17

b) A valid consideration

Question 18

What type of agency is created when the principal explicitly states their consent, either orally or in writing?
a) Implied Agency
b) Express Agency
c) General Agency
d) Ostensible Agency

Answer 18

b) Express Agency

Question 19

In an agency, who is responsible for authorizing the agent to act on their behalf?
a) Sub-agent
b) Principal
c) Third party
d) Commission agent

Answer 19

b) Principal

Question 20

Which of the following is NOT a mode of extinguishing an agency?
a) Revocation by the principal
b) Withdrawal by the agent
c) Completion of the agency’s purpose
d) Resignation of a third party

Answer 20

d) Resignation of a third party

Question 21

What is the general rule regarding acts that may be delegated to an agent?
a) Any act can be delegated
b) Only personal acts can be delegated
c) Only acts allowed by law can be delegated
d) Any act except personal acts or those prohibited by law

Answer 21

d) Any act except personal acts or those prohibited by law

Question 22

If an agent accepts an agency but fails to carry it out, what is the consequence?
a) The agency remains valid
b) The principal must compensate the agent
c) The agent is liable for damages suffered by the principal
d) The agent is automatically excused

Answer 22

c) The agent is liable for damages suffered by the principal

Question 23

What is the effect of revocation of agency by the principal?
a) The agency continues as long as the agent wishes
b) The agency is terminated immediately
c) The agent must continue to act until a replacement is found
d) The agent automatically gains ownership of the agency

Answer 23

b) The agency is terminated immediately

Question 24

When can an agency NOT be revoked?
a) When it is for the mutual interest of both principal and agent
b) When the principal loses confidence in the agent
c) When the agent requests termination
d) When a third party objects to the revocation

Answer 24

a) When it is for the mutual interest of both principal and agent

Question 25

Under what condition can an agent appoint a substitute? a) Always b) When not prohibited by the principal c) Only when dealing with financial transactions d) Only when they have express written permission

Answer 25

b) When not prohibited by the principal

Question 26

What is the effect of the death of the principal on an agency? a) The agency continues indefinitely b) The agency is automatically terminated, except in certain cases c) The agent must notify the heirs before continuing d) The agent assumes the principal’s role

Answer 26

b) The agency is automatically terminated, except in certain cases

Question 27

When does a pledge **become enforceable against third parties?** a) Only when written consent is provided b) When the pledged item is delivered to the creditor c) When the pledgee becomes the owner of the item d) When the pledgee sells the pledged item

Answer 27

b) When the pledged item is **delivered to the creditor**

Question 28

When does implied agency arise? a) When the agent acts in their own name b) When the principal explicitly authorizes the agency c) When the principal’s actions, silence, or inaction indicate consent d) When a contract is notarized

Answer 28

c) When the principal’s actions, silence, or inaction indicate consent

Question 29

What is a **general** agency? a) An agency that allows an agent to act in any legal matter b) An agency covering all business of the principal c) An agency that only covers a specific transaction d) An agency that requires notarization

Answer 29

b) An agency covering **all business** of the principal

Question 30

What is a **special** agency? a) An agency covering only a specific transaction b) An agency with unlimited authority c) An agency requiring multiple agents d) An agency granted by the government

Answer 30

a) An agency covering only a **specific** transaction

Question 31

It is a form of agency that arises when the principal’s actions, silence, or failure to repudiate indicate consent to the agency relationship.

Answer 31

Implied Agency

Question 32

Under the Nature of Agency, it is **based on trust and confidence.**

Answer 32

Personal Nature

Question 33

A person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter.

Answer 33

Agency

Question 34

Under the ways of informing Third Persons, if a person **states by public advertisement** that he has given a power of attorney to a third person, the latter thereby becomes a duly authorized agent with regard to any person.

Answer 34

Public Advertisement

Question 35

It is a contract where a debtor **delivers a movable property** to a creditor as security for a debt.

Answer 35

Pledge

Question 36

It is a legal term that refers to a **contractual clause in a pledge** or mortgage agreement where the **creditor automatically acquires ownership of the collateral** in case the debtor defaults.

Answer 36

**Pactum Commissorium**

Question 37

It refers to a loan where **real property (such as land or buildings) is used as collateral.**

Answer 37

Real Mortgage

Question 38

It involves **personal property (often movable items) being used as collateral for a loan.** This type of mortgage is often used for items like cars, machinery, or other equipment.

Answer 38

Chattel Mortgage

Question 39

It is a type of agent or entity that acts on behalf of another (the principal) to perform specific tasks or transactions, and **receives compensation in the form of a commission for their services.**

Answer 39

Commission Agent

Question 40

It is also known as the **“Del Credere Agency.”**

Answer 40

**Guarantor Agency**

Question 41

This provision incentivizes the **agent to be careful in selecting buyers and managing credit terms.** Since they are taking on the risk, they have a strong interest in ensuring the buyer is creditworthy.

Answer 41

Due Diligence

Question 42

This specific article says that when two or more principals have granted a power of attorney for a common transaction, **any one of them may revoke the same without the consent of the others.**

Answer 42

Art. 1925

Question 43

This specific article says that the **appointment of a new agent for the same business or transaction revokes the previous agency** from the day on which notice was given to the former agency, without prejudice to the provisions of the two preceding articles.

Answer 43

Art. 1923

Question 44

This specific article says that the **principal may revoke the agency at will,** and compel the agent to return the document evidencing the agency. Such revocation may be express or implied.

Answer 44

Art. 1920

Question 45

This specific article says that if 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.

Answer 45

Art. 1921

Question 46

Under the ways of informing Third Persons, if a person **specially informs another that he has given a power of attorney to a third person,** the latter thereby becomes a duly authorized agent with respect to the person who received the special information.

Answer 46

Special Information

Question 47

The **power of attorney shall continue to be in full force until the notice is rescinded** in the **same manner** in which it was given.

Answer 47

Manner of Rescission

Question 48

Under the Nature of Agency, the agent acts on behalf of the principal, and their decisions and actions, are legally considered as the principal’s actions.

Answer 48

Representative Nature

Question 49

Under the Nature of Agency, the **agent’s authority comes directly from the principal** and is limited to the powers granted. Actions beyond this authority may not be legally binding.

Answer 49

Derivative Nature

Question 50

It is the person who grants authority to another to act on their behalf.

Answer 50

Principal

Question 51

Enumerate the 7 Characteristics of a Contract of Agency

Answer 51

- Principal - Consensual - Nominate - Bilateral - Commutative - Onerous - Preparatory

Question 52

Two Parties to a Contract of Agency

Answer 52

- Principal - Agent

Question 53

Enumerate the 6 Modes of Extinguishment of Agency

Answer 53

- Revocation by the principal - Withdrawal by the agent - Death, civil interdiction, insanity, or insolvency of either party - Dissolution of firm or corporation - Accomplishment of purpose - Expiration of period