An agency relationship may be terminated in several ways for a variety of reasons; an exception to the reasons is insolvency of the principal. The Option A is correct.
Basically, agency relationship are governed by employment and contract law, so, if any issue arises this is where a party should turn for legal recourse, it is important to know the methods of termination and penalties for wrongful termination to avoid any issues.
There are several ways that party can legally terminate an agency relationship. Once the termination of the agency relationship occurs, the agent can no longer act on behalf of the principal. This means that, any other actions made by the agent holding themselves out as acting on behalf of the principal after termination has occurred will be considered unlawful on the part of the agent.
An agency relationship may be terminated in several ways for a variety of reasons such as:
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