Termination means: putting an end to the legal

relationship between the principal and the

agent.
1.By revocation of agent’s authority(Sec-203)
2. By renunciation of the business of agency by
the agent(Sec-206)
3. By the completion of business (Sec-201)
4.Principal or agent’s death (Sec-201)
5. Principal or agent becoming person of
unsound mind (Sec-201)
6. Insolvency of principal (Sec-201)
7. Expiry of time (Sec-201)
1.By revocation of agent’s authority(Sec-203)
➢ Principal may revoke his agent’s authority and that
puts an end to the agency-S.203
➢ Revocation and renunciation may be express or
implied.S.207
➢ Revocation operates prospectively.S.204
➢ Where an agency has been created for a fixed
period, a reasonable notice would be necessary to
terminate it. S.206
➢ When the authority of an agent is “coupled with
interest”, the authority conferred on the agent
cannot be revoked to the prejudice of the agent’s
interest. S.202
1.By revocation of agent’s authority(Sec-203)
Vakalatnama can be withdrawn by the client at any time.
There is no such thing as an irrevocable
‘Vakalatnama’. After collecting the case papers, the
advocate was trying to blackmail the client. The client
lost faith in him. He terminated the ‘vakalatnama’ and
sought return of his file. It was immaterial that he was
working without his professional fee. Corresponding
to the right of the client he was under professional
duty to handover papers to the client.
C.V.Sudhindra V Divine Light School for Blind, AIR
2009 Kant 5
2. By renunciation of the business of agency by the
agent(Sec-206)
➢ An agent may renounce the business of agency in
the same manner in which the principal has the right
of revocation.
➢ The agent would have to compensate the principal
for any premature renunciation without sufficient
cause. S.205(agency is for a fixed period)
➢ Reasonable notice of renunciation is necessary.
➢ If the agent renounces without proper notice, he
shall have to make good any damage thereby
resulting to the principal. S.206
3. By the completion of business (Sec-201)
➢ An agency is automatically terminated when its
business is completed.
➢ For ex: where an agent is appointed to sell goods, his
authority gets terminated when the sale is
completed. He cannot afterwards alter the terms of
the sale.
Venkatachalam V Narayanan,ILR(1914)39 Mad 376.
➢ But the Allahabad and Culcutta High Courts have
held that agency is not terminated on the
completion of the sale but continues until payment
of the sale proceeds to the principal.
Babu Ram V Ram Dayal, ILR(1890)12 All 541
4.Principal or agent’s death (Sec-201)
5. Principal or agent becoming person of unsound mind
(Sec-201)
➢ An agency is determined automatically on the
death or insanity of the principal or the agent,
irrespective of whether the other has notice of that.
➢ Acts done by the agent before death would remain
binding.
➢ Exception: A karta of H.U.F. Appoints an agent to
manage family property and he dies, the agency is
said to continue because it relates to the joint family,
and not the karta personally.
Shankar Lal V Tosan Pal Singh, AIR1934, All.553
6. Insolvency of principal (Sec-201)
➢ An agency ends on the principal being adjudicated
insolvent.

➢ However, the agency does not terminate

immediately on the presentation of a petition for the
adjudication of the principal as an insolvent.

➢ Where the agency is created by two or more

principals jointly, insolvency of one of them does not
determine the agency automatically.
7. Expiry of time (Sec-201)
➢ Where an agent has been appointed for a fixed
term, the expiration of the term puts an end to the
agency, whether the purpose of the agency has
been accomplished or not.
➢ Where the agency was to run a petrol pump for a
specified period, it was held that the agent was
bound to vacate the premises on expiry of the
period. There was no renewal clause, nor in fact
there was any renewal.
P. Sukhadev V Commissioner of Endowments,(1998)1 AP