Leasing License Practice Exam

Which of the following is NOT a way to terminate an agency?

1. Expiration of the term

2. Death of one party

3. Fulfillment of the agreement

4. Change of ownership without notice

The correct answer is: Change of ownership without notice

The termination of an agency relationship can occur through various means, and understanding how each method works is crucial. The correct answer indicates that "Change of ownership without notice" is not a standard method for terminating an agency. In contrast, the expiration of the term is a common way to terminate an agency when the period specified in the agency agreement comes to an end. Similarly, the death of one party typically terminates the agency, as the authority granted to act on behalf of another is often personal and ceases with that person’s death. Fulfillment of the agreement also serves as a method of termination since once the objectives of the agency have been accomplished, there is no longer a need for the agency to continue. In contrast, a change of ownership without notice does not inherently terminate an agency relationship because the agency agreement likely remains in effect unless explicitly stated otherwise. It is crucial that any changes in ownership are communicated between the parties involved to determine whether the agency should be terminated or continue under the new ownership. Thus, the concept of termination requires clear actions related to the agreements in place, rather than an automatic assumption based on a change in ownership.