Question

Which of the following is not a method of terminating the agency relationship by operation of law?

		Death of either the principal or the agent
		Bankruptcy of the principal
		Mutual agreement
		Insanity of either the principal or the agent

Answer 1

Answer :- Option "c" is the correct Answer

There are basically five methods of terminating an agency relationship by operation of law:

(1) Death or insanity :Death or insanity of principal or agent;

(2) Impossibility:- An agency relationship terminates if a situationarises that makes its fulfillment impossible

(3) Change circumstance :- An agency terminates when there is an unusual changein circumstances that would lead the agent to believe that the principal’s originalinstructions should no longer be valid.

(4) Bankruptcy : Bankruptcy (of the agent if it impairs his duties, of the principal if the agent no longer desires the relationship);

(5) War : The outbreak of a war between the principal’s country and the agent’s countryterminates an agency relationship between the parties.