Irrevocable agency means an agency which cannot be terminated. An agency is irrevocable in the following cases:

1. Where agency is coupled with interest:

Where the agent has himself an interest in the property which forms the subject-matter of agency, the agency cannot, in the absence of an express contract, be terminated to the prejudice of such interest (Sec. 202).

Example:

ADVERTISEMENTS:

(1) A gives authority to B to sell A’s land, and to pay himself, out of the proceeds, the debt due to him from A. A cannot revoke the authority, nor can it be terminated by his insanity or death.

It is essential that the interest of the agency should be existing at the time of creation of agency. Therefore, if the interest was created subsequently, the agency can be revoked.

Example:

A gave certain wheat to B to sell it on his (A’s) behalf. Subsequently, B gave some money to A as an advance. A ordered B not to sell the wheat. However, B sold the wheat to secure his advance. A sued B but B pleaded that the agency could not be revoked being coupled with interest. The Court held that the agency in this case was not coupled with interest as the interest of agent arose after the creation of the agency [Smart v. Sanders],

ADVERTISEMENTS:

Secondly, interest of the agent must be substantial, i.e., other than the commission to which he is entitled.

There is no absolute restriction on the termination of the agency even when it is coupled with interest but the agent should be compensated for the loss arising from such termination.

2. Where the authority has been party exercised?

The principal cannot revoke the authority given to his agent after the authority has been partly exercised, so far as regards such acts and obligations as arisen from acts already done in the agency (Sec. 204).

ADVERTISEMENTS:

3. Where the agent has incurred personal liability?

When the agent has purchased the goods on his personal liability, or where he made the payment of the good, the agency cannot be terminated.

Example:

A authorized B to buy 100 bales of cotton on behalf of A and to pay for it out of A’s money in B’s hand. B buys 100 bales of cotton in his own name so as to make himself personally liable for the price. A cannot revoke B’s authority so far as regards payment for the cotton.