Modes of Termination of Agency

MODES OF TERMINATION OF AGENCY:
The ways in which termination of agency takes place is given in Section 201 od the Indian
Contracts Act. The ways can be:
 Revocation by principal:
The principal has the right to cancel the power of an agency or an agent at any
moment. It can be done at any moment if a proper notice period is given and the
principal acts reasonably. The revocation should be done with no underlying intent,
and all of the agent's dues should be compensated after the contract is cancelled. If the
contract is dissolved in a manner that is contrary to the provisions of the contract, the
agency or agent may prosecute the principal for contractual breach. The contract
withdrawal does not discharge the principal from the deal entered with a third party.
This is a liability that must be addressed by the principal. The third party must be
informed immediately of the withdrawal of an agent.
 Renunciation of authority by the agent:
An agent, like the principal, has the authority to repudiate the contract. According to
Section 206 of the Indian Contract Act, 1872, the agent must also provide a rational
time period of notice to the principal concerning the intend to repudiate the contract;
else the, the agent may be hosted liable for the damage caused to the principal as a
result of the insufficient time frame. The agent can also inform the principle of his
intent to relinquish authority by declining to act on the principal's behalf. If the agent
abruptly quits the agreement before the obligation to the principle is fulfilled, the
agent is accountable to the principal for the damages incurred and the damage that the
principal has incurred.
 On the performance of the contract of the agency:
The agency is revoked in this scenario when the agent fulfils the specific function or
intent for which the agent was appointed. When the job is completed, the agency will
be automatically terminated.
 On case of death or insanity of either party:

Section 209 of the Indian Contract Act of 1872 states that an agent may terminate the
agency upon the demise of the principal. If either the agent or the principal dies, the
agency contract is automatically revoked because neither person can be confronted if
they are no longer alive. The agency is also cancelled if either the agent or the
principal is of insanity of mind, because an unsound person cannot contract.
 With the expiration of time period of the contract

The agency contract can be terminated because the contract time has expired after the
specified period of time. The particular time frame is documented in the contract or
mentioned verbally in this case, or if a specific event occurred.
 By an agreement made between the principal and agent:

A mutual agreement between the principal and the agent can discontinue the agency
contract. It can be accomplished either implicitly or explicitly. Because the agency is
terminated due to a mutual agreement made at any phase, the agent's authority is
terminated when the agreement between both the principal and the agent is
successfully completed.
 In case of insolvency:
According to Section 201 of the Indian Contract Act, 1872, an insolvent person is not
permitted to enter into contract because his or her liabilities becomes more than his or
her assets. Due to a lack of necessary assets and holdings, the insolvent is barred from
entering into contracts.
 By dissolution of the company:

Some cases have the firm may be regarded a principal in an agency contract, and if it
is dissolved, the contract is terminated. If either the principal or the agent's company
is dissolved, the contract is terminated.
 When the agency becomes unlawful:

when the action of either the principal or the agent makes an lawful agency may be
announced unlawful, resulting in the inability for the agency to proceed, and the
agency contract is thus terminated. It is also possible during wartime.
CASELAWS:
R Sayani vs Bright Bros

When an institution is created for a specific period of time, liability for its cessation
ahead of the time must be compensated if the revocation was not justified. There was
no reasonable warning issued for the department's hasty decision. The agent was
rewarded Rs. 4000 per month. The court ruled that there should have been at least
three months' notice. A reward of Rs. 12,000 was also permitted.
Carter Vs White
A principal obliged to pay his agent money and provided him with an agreed-upon
exchange bill with the power to fill in the drawer's name. The principal died before
the agent could successfully complete the bill. His ability to fill in the drawer's name
was not considered to be terminated.
Sukhdev Vs Commr of endowments

When an agency's name lapses or expires, it is derecognised. When the agency was
required to regulate a gas pump for a specified amount of time, the agent was
needed to depart the building at the end of the time frame. There was no provision for
extension, nor was there a clause for renewal.
CONCLUSION:
It is possible to infer that the contract of agency is an intriguing facet of contract act.
It demonstrates that an agency can be ended in a number of ways for a wide range of
reasons. It describes a relationship between the principal and the agent, and the
fundamental and most major point for a contract of agency to fail is that trust between
the two partners has eroded. In the absence of trust, the business can't take place, and
the agency is revoked or terminated.

Modes of Termination of Agency

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MODES OF TERMINATION OF AGENCY:

 On case of death or insanity of either party:

 With the expiration of time period of the contract

 By an agreement made between the principal and agent:

 By dissolution of the company:

 When the agency becomes unlawful:

R Sayani vs Bright Bros

Sukhdev Vs Commr of endowments

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