4 Ways to Terminate an Agency Relationship: Explained

Discover the four key methods of terminating an agency relationship effectively.

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Agency can be terminated in four ways: Mutual Agreement, where both parties decide to end the relationship; Revocation by the Principal, where the principal decides to terminate the agent’s authority; Renunciation by the Agent, when the agent chooses to quit; and Operation of Law, which occurs automatically in cases of death, insanity, bankruptcy, or the fulfillment of the agency’s purpose.

FAQs & Answers

  1. What does it mean to revoke an agency? Revocation of an agency occurs when the principal decides to end the agent's authority actively.
  2. Can an agent quit an agency agreement? Yes, an agent can renounce or quit the agency at any time unless bound by a contract stipulating otherwise.
  3. What is mutual agreement in agency termination? Mutual agreement is when both the principal and agent decide together to terminate their agency relationship.
  4. How does operation of law terminate an agency? Operation of law terminates an agency automatically due to events like death, bankruptcy, or fulfillment of its purpose.

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