Explanation of Article 480
The article addressed the definition of the agency contract, from which it is derived that the agency contract is a consensual contract, where the agent performs a legal act on behalf of the principal. The legal act is the original subject of the agency, and this act may be followed by material acts that are considered annexed and subordinate to it. This is what distinguishes the agency contract from other contracts, especially from the contracts of work and employment, as the subject in these is a material act. In a contract of work, the contractor undertakes to make something or perform a task for a fee without being a subordinate or representative of the employer, and in an employment contract, the worker undertakes to work under the management or supervision of the employer for a fee; thus, the subject in these contracts is a material act, unlike the agency contract where the subject is a legal act.
It is evident from the definition that the agency has several characteristics that distinguish it from others, including:
First: The legal act performed by the agent is on behalf of the principal; thus, the principal becomes a creditor if the agent lends from the principal’s money to others or a debtor if he borrows for him or performs other acts.
Second: The default in the agency contract is that it is a gratuitous contract, as will be explained, unless the agent and the principal agree on a fee or if the agent is accustomed to working for a fee.
Third: The subject of the agency contract is a legal act in principle; however, the agent may perform a material act following the legal act, such as someone appointed to sell something who may need to transport and deliver it.
Fourth: The agent is not a subordinate of the principal but acts in his place in a legal act, contrary to the employment contract where the worker is a subordinate of the employer and works under his management or supervision. Consequently, the principal is not liable for the acts of his subordinates in the agency contract, as the principal does not have actual authority to supervise and direct the agent.
Fifth: The default in the personality of the agent or the principal is that it is of consideration, so the contract ends with the death of either or the loss of capacity.
Related To
Article 480
Power of attorney is a contract under which a principal appoints an agent to act on his behalf in legal dispositions.