Question 3

Parties may mutually agree in writing to terminate an agency agreement.

An agency agreement can be terminated when both parties come to a mutual decision, typically documented in writing, which ensures clarity and legal standing for the termination.

A) Broker presents an offer that the principal considers too low

This option is incorrect as a broker presenting a low offer does not constitute a valid reason for termination. The principal is not obligated to accept any offer, and dissatisfaction with an offer alone does not provide grounds for ending the agency relationship.

B) Parties mutually agree in writing

This option is correct because mutual agreement in writing is a standard method for terminating an agency agreement. It reflects the consent of both parties and provides a clear record of their decision to end the relationship.

C) Principal dislikes one of the broker's salespersons

Disliking one of the broker's salespersons does not provide a legitimate reason for termination of the agency agreement. The principal's personal feelings about the salesperson do not negate the contractual obligations of the agency agreement unless specified otherwise.

D) Agency is coupled with an interest in the property

This option is incorrect; when an agency is coupled with an interest, it often creates a binding relationship that cannot be easily terminated by the principal alone. Such an arrangement typically protects the agent's interest in the transaction, making termination more complex.

Conclusion

Mutual agreement in writing is the only option that provides a clear and valid method for terminating an agency agreement. Other choices either reflect personal dissatisfaction or a misunderstanding of contractual obligations, which do not suffice for termination under typical agency law principles. Thus, option B stands out as the definitive correct answer.