California Real Estate Practice Exam

A power-of-attorney is terminated by:

1. Death of principal

2. Expressed revocation of principal

3. Incapacity of principal to contract

4. Any of the above

The correct answer is: Death of principal

The correct answer encompasses the complete scope of situations in which a power of attorney can be terminated, which includes several key factors. A power of attorney is a legal document that allows one person to act on behalf of another. It is important to understand that the authority granted through a power of attorney can be revoked under multiple circumstances. When we consider the death of the principal, this automatically nullifies the power of attorney because the relationship is based on the principal's capability to grant such authority. Similarly, if the principal expressly revokes the power of attorney, that action directly ends the agent's authority to act. Additionally, if the principal becomes incapacitated, this often leads to the termination of the power of attorney because a person who lacks the ability to contract cannot confer powers onto another. Thus, the correct response reflects that any of these situations—death, expressed revocation, or incapacity—can lead to the termination of a power of attorney, demonstrating the comprehensive nature of the question concerning its termination.