Under what circumstances does an agency relationship terminate?

An agency relationship typically terminates when the contracted task is completed because the fundamental nature of an agency is to act on behalf of another party for a specific purpose or task. Once that purpose is fulfilled, the need for the agency relationship ceases. In real estate and other contractual agreements, this completion marks the end of the duties and responsibilities that the agent had towards the principal.

For example, if a real estate agent is hired to sell a property, once the sale has successfully closed, the agent's role in that transaction concludes. This principle ensures that agency relationships are dynamic and only exist as long as there is a task or purpose requiring representation.

The other options do not align with the conventional termination criteria of an agency relationship. For instance, renewal of a contract suggests that the relationship continues, while mutual agreement to continue an agency relationship also implies continuation rather than termination. Financial constraints affecting a party may complicate a situation, but they do not automatically dissolve the agency relationship, unless specifically addressed through contractual terms.