An agency relationship can end in several different ways, each with different consequences for both the agent and the principal.<\/p>\n
\u27a1\ufe0f The rule:<\/strong> the agent is generally entitled to an indemnity.<\/p>\n \u27a1\ufe0f The exception:<\/strong> the principal may avoid paying it by proving that the agreement was terminated because of circumstances justifying termination on account of the agent\u2019s substantial breach of their obligations.<\/p>\n \u26a0\ufe0f In this situation, the principal bears the burden of proving the grounds excluding entitlement to an indemnity.<\/p>\n \u27a1\ufe0f The rule:<\/strong> the agent generally loses the right to an indemnity.<\/p>\n \u27a1\ufe0f The exception:<\/strong> the agent may retain that right by demonstrating that termination was justified by circumstances attributable to the principal, or by the agent\u2019s age, infirmity or illness, where equitable considerations mean that the agent cannot reasonably be required to continue the agency activity.<\/p>\n \u26a0\ufe0f Here, the agent must prove the grounds allowing them to retain entitlement.<\/p>\n \u27a1\ufe0f The outgoing agent loses the right to an indemnity.<\/p>\n \u27a1\ufe0f This does not mean that the results of their work cease to matter.<\/p>\n The customers they brought in may be taken into account when assessing their successor\u2019s indemnity claim.<\/p>\n Transferring the rights and obligations to a new agent postpones the potential obligation to pay an indemnity.<\/p>\n The ultimate extent of that obligation will depend on how the relationship with the new agent develops, particularly:<\/p>\n \u2022 the results achieved by the new agent;<\/p>\n \u2022 the continuing benefits from the customers acquired;<\/p>\n \u2022 how the relationship with the new agent ends.<\/p>\n How an agency relationship ends can affect the principal\u2019s costs and the risk of a dispute. Before deciding to change agents or terminate an agreement, it is therefore worth analysing each possible scenario.<\/p>\n","protected":false},"excerpt":{"rendered":" An agency relationship can end in several different ways, each with different consequences for both the agent and the 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The agent terminates the agreement<\/h2>\n
3. With the principal\u2019s consent, the agent transfers their rights and obligations to another person<\/h2>\n
What does this mean for the principal?<\/h3>\n
Conclusion<\/h2>\n