The Haguess, husband and wife, owned a 160+ acre tract that they decided to sell.  They enter into a listing agreement with Harvey C. Hilgendorf, a licensed real estate broker, which gave Hilgendorf the exclusive right to sell the property for a period of twelve months.  The Hagues agreed to pay Hilgendorf of a commission of 6 percent of the accepted sale price if a bona fide buyer was found during the listing period.  by letter five months later, the Hagues terminated the listing agreement with Hilendorf.  Hilgendorf did not acquiesce to the Hagues' termination, however.  One month later,buyer, willing to purchase the property at the full listing price.  The Hagues ignored the offer and sold the property to another buyer.  Hilgendorf sued Hagues for breach of the agency agreement.  Hilgendorf v. Hague, 293 N.W, 2d 272, Web 1980 IowaSup, Lewis 882 (Supreme Court of Iowa).

1.  Does a principal have the power to terminate an agency? Explain.

2.  Did the Hagues act ethically in this case?  Why or Why Not?

3.  Who wins the lawsuit and why?

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