Agent Shutian works for principal Jasmine. Shutian talks to Jasmine every Wednes
ID: 420144 • Letter: A
Question
Agent Shutian works for principal Jasmine. Shutian talks to Jasmine every Wednesday, but for the most part, Shutian carries on his responsibility with little day-to-day contact with Jasmine. Jasmine is getting quite old. Unfortunately, one Monday morning, while drinking her coffee, Jasmine choked on a sugar cube and died. Shutian, who is unaware of this fact until Wednesday, continues acting as Jasmine 's agent. Which of the following is correct? A. Shutian’s agency has been terminated by operation of law. B. Shutian's agency is terminated on Wednesday, when he discovers Jasmine’s death. C. Shutian’s agency has been terminated by operation of the parties. D. Shutian still has apparent authority until notice is given to all third parties.
Explanation / Answer
According to the Law of Agency, the agent can only act in the principal’s name as long as the principal were alive and later affirm, if necessary the, the act of his agent.
Death is a terminating event, however there is an exception: If the agent is unaware of the principal’s death, the agent’s actions until so notified are lawful.
Thus, as we can analyse from the case study that there is little day to day contact between agent Shutian and principal Jasmine. They mostly talk on every Wednesday, and Shutian carries on his responsibilities. Now, the law states that the legal relationship between principal and agent come to an end upon the demise of the principal. Jasmine died on Monday. But, agent Shutian was unaware of the death of Jasmine till Wednesday. Thus, all the acts carried on by Shutian on the behalf of Jasmine were lawful up to Wednesday. The contract between the two would end on Wednesday, when Shutian was notified about the death. If Shutian would still act as an agent after Wednesday, that would be unlawful.
Thus option (B) is appropriate which states that Shutian’s agency is terminated on Wednesday when he discovers Jasmine’s death.