Termination of agency 177make an agency irrevocable, the principal can withdraw the agent’s actual authority at any
time. However, unless third parties are informed of this, the agent might still be able to bind
the principal on account of having apparent authority.
If the principal does withdraw the agent’s authority, then this might or might not be a
breach of contract, depending upon what was agreed between principal and agent.
Similarly, an agent who terminates the agreement might be liable for breach of contract. If
the parties agree to end the agency there can be no question of breach of contract. If either
principal or agent does commit a breach of contract by ending the agency early, damages
will be assessed on normal contract principles under the two rules in Hadleyv Baxendale.
Specific performance will not be ordered to compel a party to continue to act as agent, as it
will not be ordered to enforce personal service contracts. Nor will an injunction be ordered
if it would, in effect, amount to specific performance of an agency contract. So in Warrenv
Mendy (1989)a professional boxer who had agreed to employ the claimant as his manager,
and not to employ any other manager, for a three-year period could not be restrained by
injunction from employing another manager before the end of the period. (The remedies
mentioned here are explained in Chapter 5 at pp. 154 –7.)
A fixed-term agency ends when the term is up. If the agency is not for a fixed term, either
party can end it by giving a reasonable amount of notice of his intention to do so, subject to
minimum requirements where the Commercial Agents Regulations apply. If the principal
unilaterally ends a contract of agency under which the agent was an employee, there may
be a claim for unfair dismissal (see Chapter 13 at p. 366), as well as for damages for wrong-
ful dismissal (see Chapter 13 at p. 372).
Agency is terminated automaticallyin the following ways:
(i) by frustration (this will occur for the usual reasons: that performance of the contract
becomes impossible, illegal or radically different – see Chapter 5 at p. 141);
(ii) by the death of either party;
(iii) by the insanity of either party;
(iv) by the bankruptcy of the principal; or
(v) by bankruptcy of the agent if this would render him unfit to perform his duties.
Termination and the Commercial Agents (Council Directive)
Regulations 1993
Minimum notice periods
Where a commercial agency agreement is for an indefinite period, reg. 15 sets out minimum
notice periods, as follows. In the first year of the agency contract the minimum period is
Trueman and others vLoder (1840)It was well known that an agent in London represented a certain principal in St Petersburg,
and that the agent conducted no business on his own account. The principal withdrew
the agent’s actual authority, but the agent went on to buy tallow from a third party, who
believed that the agent was still acting on behalf of the principal.
HeldThe principal was bound by the contract. The agent still had apparent authority to act
for him.