| Monograph : Agency Law |
Contents |
| |
| (11)
Termination of agency |
| |
| |
1. |
By agreement |
| |
|
|
| |
|
| a. |
On the basis that an 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. |
| |
|
| b. |
Termination by agreement may also
occur if the agency relationship is terminated pursuant
to the provisions of the agency agreement itself.
The following situations may arise in this context:
|
| |
|
| |
| i. |
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. |
| |
|
| ii. |
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. |
|
|
| |
|
|
| |
2. |
By act of the parties |
| |
|
|
| |
|
An agency may be terminated by the acts of either
the principal or the agent, as illustrated below: |
| |
|
|
| |
|
| a. |
Performance by the
agent |
| |
|
| |
If an agent is appointed to accomplish
a particular task or for a specific purpose, when
the task is accomplished by the agent or the specific
purpose is attained, the agency will terminate.
|
| |
|
| b. |
Revocation by principal
|
| |
|
| |
| i. |
The authority of an agent may
be revoked at any time by the principal. However,
unilateral revocation otherwise than in accordance
with the provisions of the agency agreement
may render the principal liable to the agent
for breach of the agency agreement. |
| |
|
| ii. |
Any word or conduct of the
principal inconsistent with the continued
exercise of authority by the agent may operate
as revocation of the agency. |
| |
|
| iii. |
Revocation of the agent's power
by the principal may not automatically discharge
the principal from liability to a third party
who is entitled to rely on the apparent authority
of the agent on grounds of representation
by the principal or previous course of dealing
with the agent before notice of revocation
is given to the third party. Therefore, notice
of revocation of an agent's power should
be given to the third party as soon as possible. |
|
| |
|
| c. |
Renunciation by agent
|
| |
|
| |
| i. |
An agent is entitled to renounce
his power by refusing to act or by notifying
the principal that he will not act for the
principal. |
| |
|
| ii. |
Unilateral termination of the
agency by the agent before he has fulfilled
his obligations to the principal under the
agency agreement will render the agent liable
to the principal for breach of the agency
agreement, such as payment of damages for
loss suffered by the principal. |
|
| |
|
| d. |
By notice |
| |
|
| |
| i. |
If the agency agreement provides
that the agency may be terminated upon either
party serving on the other written notice
of a specified duration, for example, three
months' written notice, either party may terminate
the agency agreement by serving the required
notice on the other party. |
| |
|
| ii. |
However, if the agency agreement
does not contain any termination provision,
the general rule is that reasonable notice
has to be given to the other party to terminate
the agency. |
|
| |
|
|
| |
3. |
By operation of law |
| |
|
|
| |
|
An agency may terminate by operation of law upon the
occurrence of the following events: |
| |
|
|
| |
|
| a. |
Where the party
concerned is an individual:
|
| |
|
| |
| i. |
death; |
| |
|
| ii. |
insanity; or |
| |
|
| iii. |
bankruptcy. |
|
| |
|
| b. |
Where the party concerned
is a limited company: |
| |
|
| |
| i. |
winding-up; or |
| |
|
| ii. |
receivership. |
|
| |
|
| c. |
Frustration of the
contract of agency |
|
|
| |
