Termination of agency

How agency ends

Agency authorizes an agent to act for a principal. Termination ends that authority for the assigned undertaking. Identify the event that ends the relationship before deciding what duties or contractual claims remain.

Completion and time

Performance ends an agency when its agreed purpose is accomplished. Completing a transaction through closing can fulfill an assignment; merely locating an interested buyer does not complete an assignment requiring more work. Expiration ends authority when the agreed term runs out, even if the work remains unfinished. Continuing negotiations do not themselves extend an expired agency.

Actions of the parties

Mutual agreement means both parties consent to end the agency. Revocation is the principal's withdrawal of authority. Renunciation is the agent's decision to give up the agency. Remember: the principal revokes; the agent renounces.

Ending authority does not necessarily end contractual liability. Early revocation or renunciation can terminate ordinary agency authority while creating a breach-of-contract claim. Termination alone does not establish whether compensation is owed or erase an earlier breach.

Operation of law

Ordinary agency can terminate through death of the principal or agent, loss of the legal capacity needed for the relationship, or destruction of its subject matter. Destruction of the particular building an agent was authorized to sell ends that undertaking as framed; it is not performance. Special arrangements, such as a power given as security, can have different termination rules; this lesson focuses on ordinary agency.

What remains afterward

An agent must still account for entrusted funds and property and protect confidential information that remains protected after termination. Notice may be needed to prevent reasonable third-party reliance on an appearance of continuing authority. Analyze termination, notice, compensation, and surviving duties separately.