Explanation of Article 489
The article addresses the ruling on an agent appointing another agent and the effect of this delegation.
The first paragraph clarifies the principle that an agent is not permitted to appoint another agent for the matter they were appointed for, unless the principal has authorized this. Such authorization by the principal constitutes a delegation for the agent to enter into a legal transaction represented by an agency contract, whereby the second agent becomes the principal's original agent and representative under this contract.
The second paragraph explains that an agent authorized to appoint another without specifying the person is not liable for the actions of the appointed agent except in two cases:
First Case: The agent's liability for their error in selecting the second agent, determined according to Article (48); if the agency is without compensation, the agent is obliged to exercise the care in selecting the second agent that they would in their personal affairs, without being required to exert more than the usual person's care; if they fail to exercise such care, they are liable for their error in selection. If the agency is for compensation, the agent is obliged to exercise the care of the usual person in selection; if they fail to exercise such care, they are liable for their error in selection.
Second Case: The agent's liability for any instructions given to the second agent that caused damage.
It is understood from the article that if an agent authorized to appoint a specific person does so, or is authorized to appoint an unspecified person and does so, and does not err in their selection or issue instructions that caused damage, they are not liable for the actions of the second agent.
The third paragraph clarifies that the principal may dismiss the second agent, as the agency is originally for their benefit. Likewise, the agent may dismiss the second agent they appointed, as the right to appoint an agent includes the right to dismiss them. It also clarifies that the dismissal of the first agent results in the dismissal of the second agent, in accordance with the general rule: "If the principal falls, the subsidiary falls."
Related To
Article 489
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An agent may not delegate to a third party all or part of the powers with which he is entrusted, unless authorized to do so by the principal; in such case, the sub-agent shall be deemed an agent of the original principal.
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An agent who is authorized to appoint a third party without designating a particular party shall be liable to the principal only for the fault arising from his selection of said party or for any harm sustained as a result of his instructions.
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The principal and his agent shall have the power to dismiss the sub-agent appointed by the agent. Dismissal of the original agent shall result in the dismissal of the sub-agent.