How to Terminate an Agency Agreement

Agency agreements are used in legal transactions as a means for an authorised party to act on behalf of another. During the sale or purchase of a home, a buyer or a seller will often use an agency agreement to authorise an agent, usually a real estate broker, to enter into a binding contract to purchase or sell real property. Situations may arise when either the agent or the principal (the person giving authority to an agent) may wish to terminate an agency agreement. There is specific protocol that must be observed in order to legally terminate an agency agreement.

Perform all of the duties set forth in the agency agreement. The most common way to terminate an agency agreement is for the agent to carry out all duties assigned by the principal. Following completion of all duties, unless the principal expressly provides otherwise, the agent-principal relationship ends.

Revoke the agency agreement. Speak with the agent and state that the agent is no longer authorised to act or give written notice to the agent that the legal agency period has ceased. Comply with any provisions of the agency agreement that require notification of revocation by the principal within a specified amount of time, for example, within 30 days.

Renounce duties under the agency agreement. Stop performing duties as an agent and notify the principal, verbally or in writing, that the agreement has been terminated. Be sure to comply with any terms within the agency agreement that may require notification (in writing or otherwise) within a specified amount of time.

Comply with the provisions of the agency agreement to terminate the agent-principal relationship. Most written agency agreement will give the specific steps to be taken to terminate the agreement. Compliance by agent and principal with each step results in the automatic termination of the agency agreement.

Tip

Confirm any verbal communication in writing to avoid misunderstandings about the termination of the agreement.

Warning

Consult an attorney to understand all legal implications for terminating an agency agreement.

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About the Author

Trudie Longren began writing in 2008 for legal publications, including the "American Journal of Criminal Law." She has served as a classroom teacher and legal writing professor. Longren holds a bachelor's degree in international politics, a Juris Doctor and an LL.M. in human rights. She also speaks Spanish and French.

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