Illinois Leasing Agent Practice Exam

What can lead to the termination of an agency agreement?

1. Change of broker

2. Expiration of the term of the agreement

3. Change in property value

4. Seller's decision to withdraw

The correct answer is: Expiration of the term of the agreement

The termination of an agency agreement can occur when the term of the agreement expires. This is a natural conclusion to the relationship as the parties involved have set a specific timeframe for the agency to operate. When that time is reached, the agency agreement no longer has effect, and there is no obligation for either party to continue. An expiration of the term is a common and expected reason for termination, as it reflects the parties' understanding that their collaboration was meant to be for a limited time, often aligned with market factors or specific goals. Though the other factors mentioned, such as a change of broker or a seller’s decision to withdraw, can impact the status of an agreement, they do not represent the inherent conclusion of the agreement itself, which is marked by the pre-established timeline. Changes in property value may affect the dynamics of the relationship but typically do not directly terminate the agreement unless stipulated in the contract.