Understanding the End of Principal-Agent Dynamics

The video tutorial explains how agency relationships can be terminated. It covers termination by mutual agreement, default rules in the absence of an express agreement, and the concept of an agency relationship coupled with an interest. It also discusses how parties can renounce the agency relationship, the natural termination of agency when its purpose is fulfilled, and the impact of death, incapacity, or bankruptcy on the agency relationship.

What is one way an agency relationship can be terminated?

• By the principal's unilateral decision

• By a third party's intervention

• By the agent's unilateral decision

• By mutual agreement between the parties

What is an agency relationship coupled with an interest?

• A relationship where the agent has no vested interest

• A relationship where the agent has a financial stake

• A relationship where the principal has no control

• A relationship where a third party benefits

How can an agent renounce an agency relationship?

• By refusing to perform duties

• By transferring responsibilities to another agent

• By notifying the principal and third parties

• By ignoring the principal's instructions

What happens to an agency relationship if the principal becomes incapacitated?

• The agent continues to act on behalf of the principal

• The agency relationship is paused until recovery

• The agent gains full control over the principal's affairs

• The agency relationship is terminated

Which situation could naturally terminate an agency relationship?

• The agent's decision to take a vacation

• The completion of the agency's purpose

• The principal's decision to hire another agent

• The agent's disagreement with the principal