Termination of Agency

Revocation of Authority
 Termination of Agency
• By the principal revoking his authority
• By the agent renouncing the business of the agency
• By the business of the agency being completed
• Principal or agent dying or becoming of unsound mind
• Principal being adjudicated insolvent under the provision
of any Act for the time being in force for the relief of
insolvent debtors
• A contract of Agency would terminate when the principal
or agency or subject matter of agency cease to exist or
where either party expressly revokes the contract or
becomes subject to a legal disability
 By reasonable notice
• In all mercantile or commercial contracts the question
whether the relationship can be terminated by a
reasonable notice or only by mutual consent?
• There is no general rule of performance
• There are various ways to terminate agency
• If the termination of the agency by the principal is
inequitable or works an unjust hardships on the agent,
the law requires a reasonable notice to be taken
• Where both the parties agreed (as per contract) any
unilateral termination of the relationship by either party
will be wrongful unless it in accordance with the contract
•
 Right to carry on business
• After termination of agency principal has
right to carry on business
 Dismissed agent
• He cannot be in possession of principal’s
house
 Limitation
• A suit for an account against the agent can
be brought within three years for the date
when he actually ceases to be an agent or
against his legal representatives within
three years from his death
 Where the agent has interest
• Where agent has interest in the property
which forms the subject matter of the
agency, cannot in the absence of the
express contract, be terminated to the
prejudice of such interest
 Agent’s right to sue
• Agent coupled with interest has a right to
sue.
• He may in certain situations be sued as
regards his own liabilities independent of
his principals
• If by the statutory provisions the right of an
agent is affected, he may in his own right
maintain an action
Where authority is partly exercised
• Principal cannot revoke the authority given
to his agent after the authority has been
partly exercised, so far as regards such
acts and obligations are arise from acts
already done in the agency
 Compensation
• In the presence of express or implied
contract that the agency should be
continued for any period of time, the
principle must make compensation to the
agent , or the agent to the principal, as the
case may be for any previous revocation
or renunciation of the agency without
sufficient cause
 Knowledge of termination is
necessary
• Where a person acted as an agent in
series of transactions, unless the authority
is expressly revoke to the knowledge of
other party to the contract, the agent
would be presumed to have acted as
such in subsequent transactions with that
party
 Burden of proof
• Onus is on the principal to establish that
the third persons were aware of the
revocation of the agent’s authority
 Death or insanity
• When an agency is terminated by the
principal dying or becoming of unsound
mind, the agent is bound to take, on behalf
of the representative of his late principal,
all reasonable steps for the protection and
preservation of the interests entrusted to
him
Termination of sub-agents authority
• The termination of the authority of an
agent causes the termination of the
authority of all sub-agents