Termination of Agency under Indian Contract Act, 1872
Termination of agency refers to the end of a relationship where one person, called the agent, acts on behalf of another, known as the principal. This relationship, governed by the Indian Contract Act, can cease through various means. Firstly, it might end with a mutual agreement between the agent and principal. Secondly, the principal can revoke the authority granted to the agent at any time. Alternatively, the agent can renounce their role voluntarily. Besides, termination can occur automatically under certain circumstances, such as the completion of the agency’s purpose or the expiration of a specified period. Additionally, events like the death of either party, the insolvency of the principal, or the destruction of the subject matter can lead to termination. Understanding the termination of the agency is crucial as it delineates the end of the agent’s authority to act on behalf of the principal, marking the conclusion of their legal relationship.
Termination of Agency : Indian Contract Act, 1872
The Indian Contract Act 1872 regulates contracts and agency relationships in India. An agency is a situation where one person, called an agent, acts for another person, known as the principal, with the latter’s permission. Termination of the agency is when this arrangement ends. It can happen in two ways: either the parties decide to end it themselves or certain events or laws require it to stop. So, termination of the agency is simply when the agent stops acting on behalf of the principal, either because they both agreed to stop or because certain events or laws make them stop.
Geeky Takeaways:
- Termination of agency under the Indian Contract Act can occur through mutual agreement, revocation by the principal, or voluntary renunciation by the agent.
- Agency relationships can also terminate automatically under specific circumstances, such as completing the agency’s purpose, expiration of a specified time, or the death or insolvency of the principal.
- The timing of termination varies, with immediate effect for mutual agreement, upon notification for revocation, and after reasonable notice for renunciation by the agent.
- Irrevocable agency may arise in situations involving an interest vested in the agent, potential personal loss upon revocation, or partial exercise of authority by the agent.
Table of Content
- Termination of Agency under Indian Contract Act, 1872
- Termination of Agency by Act of the Parties
- Termination of Agency by Operation of Law
- When Termination of Agency Takes Effect?
- Irrevocable Agency under Indian Contract Act
- Conclusion
- Termination of Agency: Indian Contract Act, 1872- FAQs
Contact Us