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  • Read the given passage very carefully and answer the question. An agency arrangement is a form of general contract. As such, except where the agency is irrevocable, an ag

Read the given passage very carefully and answer the question.

An agency arrangement is a form of general contract. As such, except where the agency is irrevocable, an agency can terminate in the same way as a contract is discharged. Only the act or consent of the parties to the agency or the enforcement of the law may terminate the relationship between the principal and the agent. “In the absence of anything to prove its termination, an agency, when proven to have existed, will be presumed to have continued, unless such a length of time has elapsed as destroys the presumption.” When an entity is dissolved, the obligation of the agent to work on behalf of the principal comes to an end. A government law or instrument may stipulate the timeline for the termination of an entity.

In such a case, if the instrument states in clear and unambiguous terms that after the expiry of the time stated in the instrument, an agency shall terminate without intervention on the part of the principal or administrator, the agency shall, in effect, terminate. If the parties maintain their partnership as principal and agent after the expiry of the duration given in the contract, a substantiated assumption is posed that their relationship is regulated by the original contract and that the contract is extended for a similar term. For example, where the parties entered into a contract for a year and proceeded to behave after one year under the contractual conditions, the court would conclude that the parties genuinely wanted to hold the contract alive for a period of time.

On the other hand, if no reasonable deadline has been set by the parties for the expiration of the contract, the contract is assumed to have been terminated after a reasonable period of time. “The nature of the act specifically authorised, the formality of the authorisation, the likelihood of changes in the purposes of the principal, and other factors shall determine what constitutes a reasonable period of time during which the authority continues.” In comparison, the burden of proving an agency’s termination or revocation lies with the agency.

Question

XX was YY’s agent. YY empowered XX to deal with matters on his behalf, all parties with which XX entered into contracts are held to have the right to hold YY accountable until YY notifies the world that the authority of XX is removed but he intended to retain the contract on his own account in a specific situation. Can XX do so?

 

Option: 1

No, only the Principal has the power to continue the agency here

 


Option: 2

 Yes, the agent is empowered by the principal can retain his status as an agent for some specific purposes

 


Option: 3

 Yes, the agent is the dealing person who has the power to deal with the persons as his own clientele

 


Option: 4

 It is allowed whether or not the Principal desires so or not

 


Answers (1)

best_answer

In the case of Trueman v. Loder (1840), Court observed that it makes no sense whether the agent intended to retain the contract on his own account in a specific situation. The court stated that it was quite unfair to ask the principal to tell the whole world that he had revoked his agent’s authority and that it should not be expected that he would contact someone with whom the agent was willing to enter into a deal and inform him of the termination.

Posted by

sudhir.kumar

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