How To - Terminate an Agency



An agency can be terminated or closed down by mutual agreement between the parties involved. The principal can advise the agent that the agency is no longer continuing and that any authority the agent had on behalf of the principal is now ended.

Where an agency is ended it is the principal’s responsibility to ensure that all parties involved in the past are notified of the termination. It is possible there are still ongoing issues that will bind the principal until they have been finalised and therefore other parties who have been involved need to know.

In general, the terms and instructions as to termination of an agency should be contained in a proper agency agreement. This is the preferred way things should be done, so there is no room for any confusion between the agent and the principal.

The agent can terminate the agency and advise the principal of that fact, but the agent has to realise that if there are any losses because of the termination outside of the agreement conditions, then the agent may have to meet that loss.

Other factors will also contribute the ending of an agency, such as the death of either party or bankruptcy of either part...

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