Question

A party has the right to terminate an agency agreement in all but which one of the following situations?

Completion of Purpose: The agency relationship ends once the purpose is fulfilled.
Breach of Contract: Termination is possible if one party violates the terms of the agreement.
Death or Incapacity: The death or incapacity of either party terminates the agency.
Unilateral Change of Mind: A party cannot unilaterally terminate the agency without cause.

Answer 1

An agency agreement can be terminated for reasons such as completion of the purpose, breach of contract, or death/incapacity of a party but not due to a unilateral change of mind without cause.

Step-by-step explanation:

A party has the right to terminate an agency agreement in several situations except in the following scenario: Unilateral Change of Mind. An agency relationship can come to an end upon the Completion of Purpose, meaning that once the agency has fulfilled its intended role or objective, the relationship naturally terminates.

Another instance when termination is justified is in the case of a Breach of Contract, where one of the parties fails to adhere to the terms agreed upon in the contract. Additionally, the Death or Incapacity of either party would result in the termination of an agency since it impedes the continuation of the relationship.

However, one party cannot terminate the relationship merely based on a Unilateral Change of Mind without a legitimate cause. This protection ensures stability in the contractual relationship and prevents arbitrary termination, which is crucial for facilitating business transactions and promoting economic growth.