Which is a valid basis for terminating an agency relationship?

• A. Destruction or condemnation of the property
• B. Expiration of terms of the agency
• C. Death or incapacity of either party
• D. Fulfillment of the purpose for which the agency was created

Answer: (B)

A definite end to an agency comes from the contract itself when the term of the agency expires. If the agreement specifies a finite duration, the agent’s authority stops automatically when that term ends, ending the relationship without needing any other event to occur. This is the clearest and most universally applicable basis because it’s built into the agreement and requires no additional conditions.

Other events can terminate an agency in certain situations, but they depend on specifics. Destruction or condemnation of the property might end an agency tied to that property, but it isn’t a guaranteed termination for every agency. Death or incapacity of either party typically ends the relationship, though some arrangements have exceptions or complexities. Fulfillment of the agency’s purpose ends the agency as intended, but expiration of the stated term is the most direct, always-applicable basis.