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Under the Indian Contract Act, 1872, an agency is terminated: 1. By the agent renouncing the business…

Section 201 of the Indian Contract Act provides that an agency is terminated by the principal revoking his authority, by the agent renouncing the business of the agency, by…

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Under the Indian Contract Act, 1872, an agency is terminated:
1. By the agent renouncing the business of the agency.
2. By the principal being adjudicated insolvent.
3. By the principal revoking the agent’s authority.

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Answer and explanation

Correct answer D

Section 201 of the Indian Contract Act provides that an agency is terminated by the principal revoking his authority, by the agent renouncing the business of the agency, by either party dying or becoming of unsound mind, or by the principal being adjudicated insolvent. All three listed events therefore terminate the agency, so the answer is "1, 2 and 3". Revocation is subject to the protection for an agency coupled with an interest under section 202.

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