Which of the following may terminate an agency agreement by operation of law?
A) Fulfillment of purpose
B) Mutual agreement of the parties
C) Bankruptcy of the principal
D) Renunciation by the agent

Question

Quizplus · Accepted Answer

Bankruptcy of the principal may terminate an agency agreement by operation of law. When a principal becomes bankrupt, their property including the authority to enter into agency relationships is vested in the trustee or administrator appointed by the court. Therefore, any agency relationship the principal had in existence which is not necessary for the continuance of their business may be terminated by that trustee or administrator.

Which of the Following May Terminate an Agency Agreement by Operation