Are the Hagues correct in their assertion? Explain.

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Are the Hagues correct in their assertion? Explain.


Harvey Hilgendorf was a licensed real estate broker acting as the agent of the Hagues in the sale of eighty acres of farmland. The Hagues, however, terminated Hilgendorf’s agency before the expiration of the listing contract when they encountered financial difficulties and decided to liquidate their entire holdings of land at one time. Hilgendorf brought this action for breach of the listing contract. The Hagues maintain that Hilgendorf’s duty of loyalty required him to give up the listing contract. Are the Hagues correct in their assertion? Explain.

Explanation & AnswerSolution by a verified expert


Principal H is facingfinancial problems and because of that Principal H has to give up on theirland holdings and also bring to an endthe agency relationship with Individual HH. But the financial problems of the principal do not give the principal the right to end the agency relationship created with Individual HH. So, Individual HH can recover for the losses from Principal H.

Verified Answer

No, Individual HH, being the agent of Principal H, is not under the compulsion of quitting the contract because of the financial problems faced by Principal H.

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