This section is from the book "Popular Law Library Vol3 Contracts Agency", by Albert H. Putney. Also see: Popular Law-Dictionary.
The agent, once having been appointed, if it is either the will of the principal or agent that the agency be dissolved or in any case, where it is dissolved for any reason, it is the duty of the principal to inform third persons of the termination of the agency;7 since the third person who has dealt with the agent, has a right to presume that an agency of a general nature, having once been established, that the term of the agency, or the work to be performed, will be fulfilled, or that if the authority is revoked, that they will be informed of it. Good faith then requires, that a change in the relation of the parties should be made known, and a failure to give notice would, under the circumstances as stated above, render the principal liable to the third person.
6 Armstrong vs. Cooley, 10 I11., 509; Cleveland vs. Newson, 45 Mich., 625.
7 Murphy vs. Ottenheimer, 84 I11., 39; Diversey vs. Kellogg, 44 I11., 114.
In a case where the authority of the agent is in writing, and the authority is revoked, but the written authority is left in the hands of the agent, and the agent shows the authority to a third person, who contracts with the principal on the faith of the authority, so seen, without having notice of the revocation, the principal will be held to the third person on the contract made.8 Cases like the above are decided on the old principle of law that where one of two innocent persons must suffer, the loss must be borne by the person whose act or conduct contributed toward bringing about the circumstances which made the loss or injury possible, or which directly caused it.9
3 Beard vs. Kirk, 11 N. H., 397.
9 Maple vs. Kussart, 53 Pa., 341; 91 Am. Dec, 214.
 
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