In which circumstance can agency be legally terminated?

Agency can be legally terminated in the circumstance where the principal broker becomes incapacitated. When a principal broker is incapacitated, they are unable to perform their duties or make decisions regarding the agency. This incapacity can be due to a variety of reasons, such as illness, injury, or mental incapacity, thereby affecting their ability to manage and direct the agent's actions in the agency relationship. As a result, the legal relationship between the principal and the agent comes to an end, as the principal can no longer fulfill their responsibilities or make informed decisions.

In other scenarios:

• If the principal broker chooses to retire or relocates, while this may affect the functioning of the agency, it does not automatically terminate the agency by law unless specified in the agency agreement.

• The decision of an agent to leave the firm could lead to the termination of the agency relationship, but this is under the context of the agent's choice rather than an external condition that legally necessitates a termination.

Therefore, the incapacitation of the principal broker is a legally binding condition that necessitates the termination of the agency relationship.