Sec. 85. Revocation Of Agency By Principal Must Be In Good Faith

A leading case 21 speaks generally of the right to terminate the contract of agency, in these words: "Where no time for the continuance of the contract is fixed by its terms, either party is at liberty to terminate it at will, subject only to the ordinary requirements of good faith. Usually the broker is entitled to a fair and reasonable opportunity to perform his obligation, subject, of course, to the right of the seller to sell independently. But that having been granted him, the right of the principal to terminate his authority is absolute and unrestricted, except only that he may not do it in bad faith, and as a mere device to escape the payment of the broker's commissions. Thus, if in the midst of negotiations instituted by the broker, and which were plainly and evidently approaching success, the seller should revoke the authority of the broker with the view of concluding the bargain without his aid and avoiding the payment of commissions about to be earned, it might well be said that the due performance of his obligation by the broker was purposely prevented by the principal. But if the latter acts in good faith, not seeking to escape the payment of commissions, but moved fairly by a view of his own interest, he has the absolute right before a bargain is made, while negotiations remain unsuccessful, before commissions are earned, to revoke the broker's authority, and the latter cannot thereafter claim compensation for a sale made by the principal, even though it be to a customer with whom the broker unsuccessfully negotiated, and even though, to some extent, the seller might justly be said to have availed himself of the fruits of the broker's labor."22

15 See Glover v. Henderson, 120 Mo. 367 (1893).

16 Rand v. Cronkrite, 64 111. App. 224 (1896).

17 Glover v. Henderson, 120 Mo. 377, 380 (1893).

18 Attix v. Pelan, 5 Iowa 343 (1857).

19 Id.

20 Sec. 238, 239 infra.

Sibbald v. Bethlehem Iron Co., 83 N. Y. 384 (1880).

Again, in the same case,23 the court says: "If after the broker has been allowed a reasonable time within which to produce a buyer and effect a sale he has failed to do so, and the seller in good faith and fairly has terminated the agency and sought other assistance by the aid of which a sale is consummated, it does not give the original broker a right to commissions because the purchaser is one whom he introduced and the final sale is in some degree aided or helped forward by his previous unsuccessful efforts."

22 See also Cadigan v. Crabtree, 186 Mass. 13 (1904); Newton v. Conness, 106 S. W. 894 (Tex. 1908).

23 Sibbald v. Bethlehem Iron Co., 83 N. Y. 390, 391 (1880).

Sec. 86. Revocation Must Be Timely

The termination of the agency must be timely. Where the broker has in fact procured a purchaser on his principal's terms, it is too late to revoke the broker's authority.24 Likewise, where a written authorization provided that it should remain in force until nullified by the principal in writing, a nullification after the broker has performed his obligation is too late.25 An express termination of the employment of the broker is matter of defense.26 In other words, the broker need not show as part of his affirmative case that the agency was still in force, but the principal must show the contrary, if he relies upon a revocation of the agency.