Sec. 84. Limitations On Principal's Power To Terminate Agency At Pleasure

Some of the authorities cited in the preceding sections hold that the broker's authority may be revoked at any time by the principal, acting in good faith, while others hold that the principal may do so after the lapse of a reasonable time. It may be conceded that some confusion exists. The cases may be summarized, however, and the following may be said to be a fair general deduction: Where no time is fixed, and the broker has done nothing, his authority may be terminated at any time. Where the broker has actually instituted some negotiation, the principal may only terminate the authority in good faith - that is, for some sufficient reason, or after the broker has had a reasonable time in which to make his efforts produce results. Where no time is fixed, and the property remains in the broker's hands for a long time and he then enters upon negotiations, the principal may assert that as the broker has done nothing during a reasonable time, his authority has expired "by lapse of time."

It is, however, generally conceded that in the ordinary case until the broker has actually some deal under way, the principal may withdraw the property from him and thus terminate the agency.13 In such case the broker could have no other cause for complaint than that he was thus prevented from possibly making a sale, which is altogether too speculative. It may be that where the broker has incurred expense,14 such as advertising the property, he is entitled to a fair and reasonable opportunity to perform his obligation, subject to the owner's right to sell independently.15 But it may be doubted if any recovery could be had therefor, since it is now customary for brokers to advertise property at their own risk, - unless, perhaps, the broker could show that his advertisement brought a prospective purchaser, in which case he would no doubt have to bring himself under the general rule and show that the owner terminated the agency in bad faith.

13 See Warren v. Holbrook, 118 N. Y. 592 (1889), where It was said that at any time before there was a reasonable assurance that the contract would be obtained (In that case a contract to do roofing), the principal might have terminated the agency.

"See Vincent v. Woodland Oil Co., 165 Pa. St. 402 (1894), where It did not appear that services were to be on a contingency. See also action for expenses, etc., where agent's authority was revoked pending his efforts - Jaekel v. Caldwell, 156 Pa. St. 266 (1893). See also McDonald v. Ortman, 98 Mich. 40 (1893).

If the agency is for a definite time it cannot be terminated without liability to the agent, unless for the agent's default or by virtue of some agreement to that effect.16 Where the broker was to have a definite time to sell the property and expended money in an effort to do so and the agency is revoked before the expiration of the time limit, the broker is entitled to compensation.17 If a time is fixed giving exclusive right to sell and the broker in good faith undertakes performance on his part, the principal cannot revoke the authority without compensating the broker.18 And it has been said that the principal could not himself sell during the time.19 But see the subject of exclusive agency on this point.20