Restatement (Third) of Agency · Section § 8-06
This section outlines how an agent's authority can be terminated under various circumstances within agency law.
Source: Restatement Restatement (Third) of Agency § § 8-06
An agent's authority terminates when the agent or the principal dies, when the agent becomes incapacitated, or when the agent or the principal revokes the authority.
This section explains that an agent's authority to act on behalf of a principal can end in specific situations like death, incapacity, or revocation of authority. This termination is important for ensuring that agents cannot act beyond their power after such events occur.
The principal retains the right to revoke authority except in situations where it would violate a contractual obligation.
An agent's authority can also be terminated by a breach of fiduciary duty.
Illustration 1
If a principal dies, any authority granted to the agent ceases immediately, regardless of the circumstances.
Illustration 2
If an agent is incapacitated due to illness, they can no longer act for the principal, terminating any existing authority.
The court discussed the implications of an agent's authority being terminated due to the principal's death.
Understanding the termination of an agent's authority is critical for both principals and agents to avoid unauthorized actions that could lead to liability. This section also emphasizes the importance of clear communication regarding the status of agency relationships.