What is a termination of agency?

A termination of agency refers to the conclusion of the relationship between the agent and the principal. This can occur through various means, such as mutual agreement, the completion of the agency purpose, expiration of the term agreed upon, or the occurrence of certain events. Understanding this concept is essential because it encompasses all the potential ways an agency relationship can end, highlighting the fluid nature of such arrangements and the necessity for clear communication and terms between parties.

In contrast, the other options describe scenarios that do not pertain to the ending of an agency relationship. Starting a new agent-principal relationship, negotiating new terms, or renewing responsibilities all imply that some form of agency still exists, whereas termination specifically denotes that the relationship has ceased.