Posted February 1, 2014 by advocateguru in Learning Centre

Termination of agency by operation of law

i.            Perofrmnace of contract- the most obvious mode of putting an end to the agency is to do what the agent has undertaken to do. Where the agency is for a particular object; then it is terminated when the object is accomplished or when the accomplishment of the object becomes impossible.

ii.            Expiry of time- when the agent is appointed for a fixed period of time, the agency comes to an end after the expiry of that time even if the work is not complete.

iii.            Death and insanity- when agent or principal dies or becomes of unsound mind, the agency is terminated. When the termination thus takes place, the agent must take on the representatives of his late principal, all reasonable steps for protection and preservation of the interests entrusted to him.

iv.            Insolvency- the insolvency of the principal puts an end to the agency. Also, the insolvency of the agent also terminates the agency unless the acts to be done by the agent are merely formal acts.

v.            Destruction of subject matter- an agency which is created to deal with a certain subject matter comes to an end by the destruction of the subject matter.

vi.            Principal becoming an alien enemy- when the principal and the agent are aliens, the contract of agency is valid so long as the countries of the principal and the agent are at peace. If war breaks out between the two countries, the contract then is terminated.

vii.            Dissolution of a company- when a company whether principal or agent, is dissolved the contract of agency with or by the company automatically comes to an end.

viii.            Termination of sub agent’s authority- the termination of an agents authority puts an end to the sub agent’s authority.