Difficulty: Easy

Average Score: 83%

A principal MAY terminate an agency agreement when the:

Rationale

Parties mutually agree in writing.

A principal has the right to terminate an agency agreement at any time if both parties come to a mutual agreement in writing, reflecting their consent to end the relationship. This mutual termination is a legally recognized method that respects the autonomy of both parties involved in the agency agreement.

A (broker presents an offer that the principal considers too low) YOUR ANSWER

While a principal may choose not to accept a low offer presented by the broker, this does not grant them the authority to terminate the agency agreement. The agreement remains in effect until one of the legally defined termination conditions is met, such as mutual consent or fulfillment of the agency's purpose.

C (principal dislikes one of the broker's salespersons) YOUR ANSWER

A principal's personal feelings about a broker's salesperson do not constitute a valid reason for terminating the agency agreement. The contract is with the broker as a whole, and unless the agreement stipulates otherwise, the principal cannot terminate the arrangement based solely on a personal dislike for an individual involved.

D (agency is coupled with an interest in the property) YOUR ANSWER

When an agency is coupled with an interest, it means that the broker has a vested interest in the property, which protects the broker's right to complete the transaction. In such cases, the principal cannot terminate the agency agreement unilaterally, as the broker's interest binds them to the contract until the specific conditions are met.

Conclusion

The only valid method for a principal to terminate an agency agreement is through mutual consent in writing, allowing both parties to amicably end the relationship. Other choices pertain to subjective opinions or contractual protections that do not allow unilateral termination, underscoring the importance of adhering to the agreed-upon terms of the agency.

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