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Similarly, the relationship between agent and principal comes to an end when principal or agent becomes insane, for a person of unsound mind cannot contract. 4. Insolvency of the Principal: When the principal is declared as insolvent, the agency is terminated.

Explanation:

Answer:

An agent’s authority can be terminated at any time. If the trust between the agent and the principal has broken down, it is not reasonable to allow the principal to remain at risk in any transactions that the agent might conclude during a period of notice.

Explanation:

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