Explain the different modes of termination of agency. In what manner and circumstances can agency be revoked ? Or When does a contract of agency comes to an end ?

Ans. Termination of agency.—An agency is terminated :

(i) by the principal revoking his authority ; or (Section 203, Indian Contract Act).

(ii) by the agent renouncing the business of the agency ; or (Section 206 Indian Contract Act)

(iii) by the business of the agency being completed ; or

(iv) by either the principal or agent dying or becoming of unsound mind (Section 201, Indian Contract Act)

(v) by the principal being adjudicated an insolvent (Section 201, Indian Contract Act). This section is incomplete and does not mention following circumstances of termination;

(vi) by the destruction of the subject-matter of agency :

(vii) by the happening of any event rendering the agency unlawful—by declaration of war the principal and agent may become alien enemies

(viii) if a limited period is given and when the period comes to an end whether the business is completed or not.

Manner and circumstances of Revocation.—The principal may save where the agent has himself an interest in the property which forms the subject-matter of the agency, revoke the authority given to his agent at any time before the authority has been exercised so as to bind the principal. (Section 203, Indian Contract Act) The principal cannot revoke the authority given to his agent after the agent has partly exercised his authority so far as regards such acts and obligations as arise from acts already done in the agency. (Section 204, Indian Contract Act) Revocation affects prospectively and not retrospectively. The day of revocation is the dead line beyond which no action of agent will be binding on the principal. Reasonable notice must be given of such revocation. Revocation may be express or implied in the contract of the business. (Section 206, Indian Contract Act). The reasonable notice of revocation of agency must be given by the party concerned. In case of default the loss is to be made good by the party in fault. Revocation and renunciation may be expressed or may be implied in the conduct of the principal or agent respectively. (Section 207, Indian Contract Act). Illustration A empowers B to let A’s house. Afterwards A lets himself. this is implied revocation of B ‘s authority.