Book Opener

ACTUAL NOTICE OFTERMINATIONThe law gives an extradegree of responsibility to aprincipal when the principalhas permitted an agent tobuy on credit from thirdparties. What is the besttype of mail service to usewhen extending actualnotice of the terminationof an agency relationshipto a third party?426 Unit 4: Being an Agent and Getting a JobAgent’s WithdrawalAn agent may terminate the agency at any time. However, if terminationinvolves a breach of contract, the agent may be liable for anydamages suffered by the principal.Agent’s DischargeThe principal may terminate an agency relationship at any time byfiring the agent. There are some limits on the authority of the principalto fire an agent, however. When an agent has an interest in the subjectmatter of the agency, he or she is said to have an irrevocable agency,which cannot be discharged by the principal.Example 11. Pamona Pratt borrowed money from a financialinstitution, Associated American, to remodel her office building.To repay the loan, she appointed Associated American as an agentfor the collection of rent money from her tenants. The understandingwas that the rent money was to be applied to repayment of theloan and that the agency would last until the loan was fully repaid.Notice to Third PartiesThird parties who have done business with the principal through anagent or who knew of the agency relationship are entitled to notice ofits termination. A principal who fails to notify third parties when anagency has ended may be liable for future acts of the agent.