Question

1. Meera appointed Asad as her agent. She instructed Asad to sell two houses belonging to her at the current market value. According to their agreement, the houses should be sold within a year. After his appointment as an agent, Asad met with a terrible road accident. He became semi paralysed and cannot move without assistance.

Advise Meera on whether she can terminate Asad's appointment.

Answer 1

Meera has the following options, following Asad's terrible accident, where he becomes semi paralyzed, and therefore cannot perform the agreement as originally arranged, because the circumstances have changed;

(i). The agency relationship is consensual and exists as long as both parties agree to be a part of it, unless there is a contract stating otherwise; and therefore both parties can freely withdraw from the agency at any time.

(ii). Meera and Asad can mutually agree to terminate the agency at any time.

(iii). Due to incapacitation, where the original circumstances for performance have changed, Meera can terminate the Asad's appointment, since performance will not be as originally expected.

(iv). If both parties had stipulated specific events that can cause termination, including the case of an accident that may reduce or hinder the capacity of one party to perform, then Meera is entitled to terminate the appointment.

(v). Meera can also allow Asad to appoint a third party to perform on his behalf, with the approval of Meera.

Explanation:

When Meera terminates Asad's appointment as a result of the accident which hugely reduces his capacity to perform, the court of law will step in and terminate the agency relationship if Asad refuses to do so. Once the appointment is terminated, Asad no longer has authority to act for Meera. Meera will also need to inform third parties that the agency relationship has been terminated.