Short answer. Scope. Article 1876 says an agency is either general or special: a general agency comprises all the business of the principal, while a special agency covers only one or more specific transactions. So the difference is how much the agent is authorised to handle — everything, or just the particular matters named.
What the law says
An agency is either general or special. The former comprises all the business of the principal. The latter, one or more specific transactions.
Civil Code, Article 1876 — General and Special Agency. Read the full provision →
Two kinds, defined by scope
Article 1876 draws a basic line between agencies according to how much of the principal's affairs they cover. An agency is either general or special. The former comprises all the business of the principal. The latter, one or more specific transactions. A general agency is broad: the agent is authorised to handle the principal's business generally, across whatever comes up within it. A special agency is narrow: the agent is authorised for a specified transaction or a defined set of them, and no more.
Why the distinction matters
The classification is not just descriptive; it shapes what an agent can bind his principal to. A general agent, put in charge of the principal's business, carries the authority that ordinarily goes with running that business, and third parties dealing with him can generally rely on that apparent scope. A special agent's authority is confined to the transaction he was appointed for; someone dealing with him is on notice that his power is limited and should check its bounds. So the same act can be within one kind of agent's authority and outside another's.
Not the same as a general vs special power
It helps to keep this distinction apart from another that sounds similar. Whether an agency is general or special is about how much of the principal's business it covers. That is different from whether the agent holds a general or a special power of attorney, and different again from the rule that certain important acts — selling land, borrowing, compromising, donating — require a special power however broad the agency otherwise is. So a general agent, entrusted with all the principal's business, still cannot do those special-power acts unless separately and specially authorised. Breadth of the agency does not by itself confer the specific authorities the law insists be spelled out.
When it matters to you
If you are appointing an agent, decide deliberately which you want: a general agency to run your affairs, or a special agency for a defined task — and say so, because the label signals to everyone how far the agent's authority runs. If you are dealing with someone's agent, find out which kind he is, since a special agent binds the principal only within his specific mandate. And whichever kind, remember that the big-ticket acts still need a special power of their own. Matching the scope of the agency to the job, and confirming any special authorities separately, is what avoids acts that turn out to bind no one.
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.
- Epitacio Sialana vs. Mary Y. Avila, et al, G.R. No. 143598, July 20, 2006 — read the decision on LawPhil →