TERMINATION OF AGENCY

Wednesday, November 4, 2009


An agency may be terminated by any of the following modes.

1. Expiration of Period:

If agency is formed for a fixed period it may come to an end on the expiry of the period even if the business is not completed.

2. By Mutual Consent:

The agency can be dissolved at any time by the mutual consent between the principal and the Agent.

3. Death of Agent or Principal

The relation between an agent and a principal is entirely personal. So death of either dissolves the Agency.

4. Destruction of the Subject Matter:

The agency dissolves if the subject matter of the agency is destroyed.

Illustration

If an agent is employed to sell a house, the agency terminates if the house is destroyed by fire.

5. Completion of Particular Job:

If an agency is formed to carry on a particular under taking, it stands terminated on the completion of the particular job.

6. By Becoming Alien Enemy:

The contract between the agent and the principal may be terminated by illegality, as where the agency involves dealings with enemy aliens.

7. By Insanity:

When the principal has become insane the agency itself is automatically terminated, and the same is true where the agent becomes insane.

8. Revocation of Authority:

The principal may terminate the agent’s real or actual authority at any time so when the principal revokes his authority of the agent, the agency is terminated.

9. Bankruptcy of Principal:

The principal’s bankruptcy terminates the authority of the agent. This fact will thus dissolve the agency.

10. Winding up of Company:

The principal or agent may terminates the agency at the winding up of the company.

11. Termination of Authority:

When the agent gives up his authority, the agency is terminated.

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