Final answer:
Yes, the statement is true as either the principal or agent can sue for damages if the other party breaches the agency contract by wrongfully terminating it.
Step-by-step explanation:
If the principal or agent's termination of an agency contract breaches the contract, the other party can sue to recover damages for wrongful termination. This statement is true. In an agency relationship, both parties have obligations and rights under the contract. Should either party terminate the contract in a manner that violates the agreement's terms, the non-breaching party has the right to seek compensation for any losses incurred due to the wrongful termination.