TERMINATION OF AGENCY RELATIONSHIP

Question 1

When does an agency relationship terminate?

Answer 1

an agency relationship ends when the principal or the agent (1) manifests to the other that the relationship is over, (2)
when a specified term of the agent’s authority expires, (3) upon operation of law by the death of the principal or agent, or (4) upon operation of law by the incapacity of the principal or agent

Question 2

How does death impact the agency relationship at common law?

Answer 2

Under common law, an agent’s authority revoked is upon death and it is irrelevant if the third party has notice of the death

Question 3

What do some states require before death will revoke agency?

Answer 3

In some states, the authority is not revoked until the third party is notified of the principal’s death

Question 4

How long does apparent authority continue?

Answer 4

apparent authority continues until the principal communicates the termination to third parties

Question 5

How can a principal communicate termination of apparent authority?

Answer 5

A principal communicates termination of apparent authority by (1) notifying third parties directly, (2) by making a public announcement, or (3) by recovering from the agency any items indicating authority; principal may terminate the agent at any time even if the agency relationship is governed by a contract

Question 6

What happens if the agency is governed by contract and the principal terminates the agent?

Answer 6

The principal be liable for damages if the agency is terminated prior to the expiration of the contract term

Question 7

When will the principal not be liable for damages if the agency is terminated prior to the expiration of the contract
term?

Answer 7

the principal will not be liable for damages if the agency is terminated prior to the expiration of the contract term if the agent
materially breached the contract