By the Act of PartiesĪn agency may be terminated by the acts of either the principal or the agent as illustrated below:- Performance by the agent If the agreement provides for the agency to terminate upon the occurrence of a specified event, the agency will come to an end upon the happening of the specified event. If the agreement provides for the appointment of the agent for a specified period of time, the agency will come to an end automatically when that period of time expires. The following situations may arise in this context: Termination by agreement may also occur if the agency relationship is terminated pursuant to the provisions of the agreement itself. On the basis that agency relationship is created by agreement between the principal and the agent, such a relationship can also be brought to an end by mutual agreement between the parties, either in writing or orally. If the trust between the agent and the principal has broken down, it is not reasonable to allow the principal to remain at risk in any transactions that the agent might conclude during a period of notice.Īgency can be terminated by the following ways: By Agreement IntroductionĪn agent’s authority can be terminated at any time. This paper examines these situations and analyses the effect of the termination of the agency. Since the relationship of agency is one that is based on trust, there may arise circumstances where this trust no longer subsists and as a result, the agency may have to be terminated. There are certain duties that the parties owe each other. An agency can be created by express or implied appointment, necessity or estoppel. An agency relationship is fiduciary in nature.
Editor’s Note: The contract of agency is defined as one where one party- the principal, grants authority to another party- the agent, to act on behalf of and under the control of the principal to deal with a third party.
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