Site navigation

The special contract of agency under the Indian Contract Act, 1872 is NOT terminated by

Question and options

The special contract of agency under the Indian Contract Act, 1872 is NOT terminated by
  1. insolvency of the agent
  2. renunciation of the business of agency by the agent
  3. completion of the business of agency
  4. death or insanity of the agent

Answer and explanation

Correct answer: A - insolvency of the agent
Under s. 201 of the Indian Contract Act, 1872 an agency is terminated by the principal revoking his authority, by the agent renouncing the business of the agency, by the business being completed, by either party dying or becoming of unsound mind, or by the principal being adjudicated an insolvent. Insolvency of the agent is not among these grounds, so it does not by itself terminate the agency, whereas renunciation, completion and the agent's death or insanity all do.

Practice for these exams

Related question papers

Related exam syllabi

More solved explanations in Agency