Where this fits on the exam
| Official syllabus topic | Termination of Agency |
|---|---|
| Official PSI area | Agency |
| Published area weight | 13% of the national portion |
| Exam portion | National salesperson portion |
| Source edition | PSI Georgia Candidate Information Bulletin dated July 1, 2026 |
The Rule
PSI publishes the weight for the complete content area, not a fixed question count for this lesson. Learn the rule well enough to apply it when PSI changes names, numbers, or parties in a new scenario.
The lesson
Purpose and time
Performance of the authorized objective or expiration of the stated term ends authority without requiring a breach.
Mutual or unilateral ending
Parties can mutually terminate. Revocation and renunciation end authority in many circumstances but may breach a contract if exercised without a contractual or legal right.
Operation of law
Death, incapacity, destruction, illegality, or bankruptcy can end or alter authority depending on the agency type and applicable law.
Surviving duties
The agent must return property and account for funds. Confidentiality and obligations arising before termination can continue, and a protection clause may preserve compensation rights.
Decision rule
Georgia-specific distinction
Worked example
Scenario. A seller revokes a six-month exclusive listing after one month without a contractual ground.
Reason it through. The seller can communicate that the broker no longer has authority, but early revocation may violate the listing contract.
Answer. Agency authority can end while a possible contract claim remains.
Common exam traps
- Assuming termination erases damages
- Revealing confidential information afterward
- Ignoring protection periods
- Keeping client property after termination
Original practice questions with detailed explanations
These questions were written for instruction and mapped to the current outline. They are not copied from PSI or any live examination. Choose an answer before opening the explanation.
Question 1Four months into a six-month exclusive listing, the seller emails the broker, "You no longer represent me." The agreement gives no early-termination right. What is the result?
- A. The broker keeps authority until the term ends
- B. The revocation is void without broker consent
- C. The listing ends and all claims are released
- D. Authority ends, but the seller may owe damages
Show answer and explanation →
Answer: D. Authority ends, but the seller may owe damages
A principal has the power to revoke authority but not always the right, so the broker can no longer act while a breach claim may remain. Believing the broker keeps authority until the term ends is the common mistake, because it confuses contract rights with the power to end agency.
- A. Incorrect. The principal generally can revoke authority even before the contract's scheduled end.
- B. Incorrect. The broker's consent is not always necessary to end the authority to act.
- C. Incorrect. Ending authority does not automatically eliminate liability for breaching the engagement.
- D. Correct. Revocation ends the authority, while an unjustified early termination may create contractual liability.
Question 2A broker holds an open listing on a home. Before any buyer is found, the seller dies. What usually happens to the broker's authority?
- A. It passes to the seller's heirs automatically
- B. It continues until the listing term expires
- C. It ends by operation of law
- D. It converts to an exclusive-agency listing
Show answer and explanation →
Answer: C. It ends by operation of law
Death of the principal generally ends an ordinary agency by operation of law, because the agent can no longer act for someone who no longer exists. Passing automatically to heirs is wrong because heirs or the estate would have to create a new agreement.
- A. Incorrect. The heirs do not automatically become parties to the deceased seller's personal agency.
- B. Incorrect. A stated term does not override termination by operation of law on the individual principal's death.
- C. Correct. Death of the individual principal generally terminates this agency by operation of law.
- D. Incorrect. An open listing does not convert to exclusive agency when the principal dies.
Question 3A Georgia listing expires and the seller hires another firm. During the former engagement, the seller expressly asked that the bottom-line price and personal reason for selling remain confidential. Without authorization or a legal disclosure requirement, what duty survives?
- A. Share what they know, since the agency has ended
- B. Keep the former client's confidences private
- C. Share only the lowest price the seller would take
- D. Share the reason for moving but not the price
Show answer and explanation →
Answer: B. Keep the former client's confidences private
Confidentiality survives the end of the agency, so the former client's motivation and bottom line stay private. The first option is the classic trap: termination ends authority to act, not the duty to protect information learned during the relationship.
- A. Incorrect. The end of the engagement does not authorize release of information the client requested be kept confidential.
- B. Correct. Georgia's surviving duty protects the requested confidential information, subject to authorized or legally required disclosure.
- C. Incorrect. Confidentiality is not confined to price when other information was also requested to remain private.
- D. Incorrect. A private reason and a private bottom-line price can both remain protected.
Ready to move on?
You are ready for the next lesson when all of these are true.
- Explain Termination of Agency in one clear answer without notes.
- Separate Purpose and time from Mutual or unilateral ending using a fresh example.
- Apply the decision rule to a new fact pattern and name the fact that controls the result.
- State the Georgia-specific point or explain why the national rule applies unchanged.
- Answer every practice question and explain the rule each rejected option misapplies.
- Revisit this topic later in mixed practice without category labels.
Recommended next lesson
Continue with Seller Property Disclosure. Duties that outlast the listing lead naturally into seller property disclosure, where you learn why a disclosure form reports known conditions but is not a warranty, and why Georgia's lack of one mandatory form never permits concealing a known defect.
Return to the Agency hub to see every official branch and the complete lesson sequence for this content area.