New York Real Estate Salesperson ExaminationLaws of AgencyMedium
An agency relationship can be terminated by several actions. Which of the following would NOT typically terminate an agency relationship?
- AThe fulfillment of the agency's purpose.
- BMutual agreement of the principal and agent.
- CThe agent's decision to take a vacation.
- DThe death or incapacity of the principal.
Show answer & explanationAnswer & explanation
Correct answer: C. The agent's decision to take a vacation.
An agent taking a vacation does not terminate an agency relationship. The relationship is typically terminated by the completion of the task, expiration of the agreement, mutual agreement, destruction of the property, or death/incapacity of either party.
Why the other options are wrong
- A. Fulfillment of purpose (e.g., selling the property) naturally terminates the agency.
- B. Mutual agreement is a common way to terminate any contract, including agency agreements.
- D. Death or incapacity of either the principal or agent typically terminates the agency by operation of law.
Termination of Agency
The cessation of the agency relationship between a principal and an agent, ending the agent's authority to act on behalf of the principal.
- Can occur by acts of the parties or operation of law.
- Fulfillment of purpose is a common termination method.
- Death, incapacity, or destruction of property also terminates agency.
Memory trick: F.E.M.D.D. — Fulfillment, Expiration, Mutual, Destruction, Death/Incapacity.