Read also: HOW DO YOU EXTINGUISH CONTRACT OF AGENCY?
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The principal may revoke the agency at will.
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An agency cannot be revoked if a bilateral contract depends upon it, or if it is the means of fulfilling an obligation already contracted, or if a partner is appointed manager of a partnership in the contract of partnership and his removal from the management is unjustifiable.
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Bilateral contract that depends upon the agency is considered an agency coupled with an interest, making it an exception to the general rule of revocability at will.
Contract of Agency may be extinguished either by revocation, by the withdrawal of the agent, by death, civil interdiction, insanity or insolvency of the principal or of the agent, by dissolution of the firm or corporation which entrusted or accepted the agency or accomplishment of the object or purpose of the agency, or by expiration of the period for which the agency was constituted.
The principal may revoke the agency at will. Such revocation may be express or implied. The principal may revoke the agency at will at any time, at his mere option, with or without reason. This is because an agency relationship is voluntary. However, there are instances where agency cannot be revoked at will by the principal.
Civil Code Provides That:
ARTICLE 1927. An agency cannot be revoked if a bilateral contract depends upon it, or if it is the means of fulfilling an obligation already contracted, or if a partner is appointed manager of a partnership in the contract of partnership and his removal from the management is unjustifiable.
Thus, Contract of Agency cannot be revoked:
- if a bilateral contract depends upon it;
- if it is the means of fulfilling an obligation already contracted,
- if a partner is appointed manager of a partnership in the contract of partnership and his removal from the management is unjustifiable.
In the case of International Exchange Bank Now Union Bank Of The Philippines vs Spouses Jerome and Quinnie Briones, and John Doe (G.R. No. 205657, March 29, 2017) the Supreme Court ruled that bilateral contract that depends upon the agency is considered an agency coupled with an interest, making it an exception to the general rule of revocability at will. Further, Lim v. Saban (488 Phil 236 (2004)) emphasizes that when an agency is established for both the principal and the agent, an agency coupled with an interest is created and the principal cannot revoke the agency at will.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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