Short answer. No. Under Article 1927 of the Civil Code, an agency cannot be revoked if a bilateral contract depends upon it. If the agency is the foundation that keeps your mutual obligations alive, the principal cannot unilaterally pull that foundation away.
What the law says
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.
Civil Code, Article 1927 — Irrevocable Agency (Agency Coupled With an Interest). Read the full provision →
The general rule and its exception
As a general rule, a principal may revoke an agency at will — the relationship is built on trust, and the law permits withdrawal of that trust. Article 1927, however, carves out situations where revocation would be an abuse of that power. When a bilateral contract depends on the agency, the agency is irrevocable. This is because revoking the agency in such a case does not merely end the agency relationship — it effectively destroys the very contract the parties entered together.
What makes an agency depend on a bilateral contract
A bilateral contract is one where both parties are bound to reciprocal obligations — something owed on each side. If the agent's authority to act is what enables the contract to function, then the agency is "coupled with an interest" in that bilateral arrangement. An example: a seller grants a real-estate agent authority to sell property, and in the same transaction the seller promises the agent an exclusive right to earn a commission in exchange for the agent's commitment to market the property. The agency powers and the bilateral commitments are intertwined. Revoking the authority destroys the agent's ability to earn what was promised.
The three situations where an agency is irrevocable
Article 1927 identifies three distinct grounds for irrevocability: (1) a bilateral contract depends upon the agency; (2) the agency is the means of fulfilling an obligation already contracted; and (3) a partner is appointed manager of a partnership in the contract of partnership and his removal from the management is unjustifiable. Your situation — a bilateral contract that rests on the agency — falls under the first ground. The second and third grounds address different configurations, but all share the same logic: the agency has been made the backbone of a legal arrangement, and revocation cannot be used to dismantle it unilaterally.
What the principal can and cannot do
Even with irrevocable agency, the principal does not lose all recourse. If the agent has breached the contract or acted in bad faith, remedies remain available. What the principal cannot do is revoke the authority for convenience, or to escape an obligation, or in a way that effectively nullifies the bilateral arrangement the parties agreed on. If a purported revocation is issued, it may be held ineffective — the agent's authority to act survives and any acts taken in reliance on that authority remain valid as between the parties.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- International Exchange Bank now Union Bank of the Philippines vs. Sps. Jerome and Quinnie Briones and John Doe, G.R. No. 205657, March 29, 2017 — read the decision on LawPhil →
- Genevieve Lim vs. Florencio Saban, G.R. No. 163720, December 16, 2004 — read the decision on LawPhil →
- National Sugar Trading, etc. vs. Philippine National Bank, G.R. No. 151218, January 28, 2003 — read the decision on LawPhil →