Ch. 6: Terminating Agency
The most desirable way to terminate agency is through: A. fulfillment of purpose B. mutual rescission
A. fulfillment of purpose
termination by action of parties
Because agency relationships must be consensual, either party may choose to end the relationship at any time. Additionally, the occurrence of certain events, like the death of the principal or broker, will terminate an agency relationship by operation of law.
Seller Jerry goes bankrupt. What happens to the previously created agency relationship between Seller Jerry and his agent? A. the relationship enters a 30-day suspension B. the relationship enters a 30-day trial period C. the relationship is terminated D. the relationship is unaffected
C. the relationship is terminated A bankrupt seller means a terminated agency relationship.
abandonment
If the agent is not doing anything to accomplish the goals established through the creation of agency, they have breached the agreement via abandonment, and the principal can likely terminate the agreement with cause.
agency coupled with an interest
If the broker has a financial or security interest in the subject property at the center of the agency agreement, the principal or client does NOT hold the right to revocation of agency.
What happens if the salesperson passes away?
On the other hand, if a salesperson dies, their sponsoring broker simply has to reassign a new sponsored salesperson to the relationship to act on their behalf. The signed agreements, because they were with the broker and NOT the deceased agent, remain valid and in force.
termination by expiration
When the parties don't agree to renew the agreement after the termination date, the agency relationship is said to have been terminated by expiration.
What happens if the broker passes away?
all listing agreements or buyer-broker agreements are null and void, and a license holder must find a new sponsoring broker in order to continue representing the client
renunciation
an agent may, at any time, decide to leave an agency relationship Since the broker is technically the agent of the principal (special agency is created at the broker level), only the broker can officially end an agency agreement with the principal. If a salesperson wanted to terminate an agency relationship and the broker did not, the broker could technically assign a different sponsored salesperson to represent the principal.
The term for when the client initiates the termination of the agency agreement is known as __________.
revocation
mutual agreement/mutual rescission
when both parties make this decision, mutually agreeing to end the agency relationship When a mutual agreement to terminate does happen, both parties are released from liability for breach of contract. That is why mutual agreement is thought to be the best form of early termination of agency. And, for the protection of all parties, it is always wise to put the mutual agreement to terminate agency IN WRITING.
Can a client fire their agent at any time?
yes
