What is the term for when a principal unilaterally terminates an agreement with their agent?

What is the term for when a principal unilaterally terminates an agreement with their agent?

• A. Withdrawal of authority
• B. Cancellation of agreement
• C. Mutual Termination
• D. Dismissal of agent

Answer: (A)

The term "Withdrawal of authority" refers specifically to a situation where a principal unilaterally decides to terminate the authority that they have granted to their agent to act on their behalf. This action reflects the principal's decision to revoke the agent's power to represent them, which can happen for various reasons, such as a change in business needs or a loss of trust in the agent's abilities. In this context, the other choices do not accurately capture the essence of a unilateral termination by a principal. "Cancellation of agreement" generally refers to the nullification of a contract between two parties rather than the specific act of revoking an agent's authority. "Mutual Termination" implies an agreement between both parties to end their relationship, which does not align with the principal acting alone. "Dismissal of agent" could imply a broader action that includes potential employment considerations and may not strictly refer to the legal nuance of authority withdrawal. Thus, "Withdrawal of authority" is the most appropriate term because it specifically denotes the action taken by a principal to terminate an agent's authority singularly.

The term "Withdrawal of authority" refers specifically to a situation where a principal unilaterally decides to terminate the authority that they have granted to their agent to act on their behalf. This action reflects the principal's decision to revoke the agent's power to represent them, which can happen for various reasons, such as a change in business needs or a loss of trust in the agent's abilities.

In this context, the other choices do not accurately capture the essence of a unilateral termination by a principal. "Cancellation of agreement" generally refers to the nullification of a contract between two parties rather than the specific act of revoking an agent's authority. "Mutual Termination" implies an agreement between both parties to end their relationship, which does not align with the principal acting alone. "Dismissal of agent" could imply a broader action that includes potential employment considerations and may not strictly refer to the legal nuance of authority withdrawal.

Thus, "Withdrawal of authority" is the most appropriate term because it specifically denotes the action taken by a principal to terminate an agent's authority singularly.