How can the death of a principal affect an agent’s power to make contracts?

In the context of agency law, the death of a principal generally terminates an agent’s power to create contracts, though the specific legal consequences depend on the jurisdiction.12

• Traditional English View: Under the traditional approach, the death of a principal automatically terminates the agent’s powers, regardless of whether the agent or the third party was aware of the death. This rule is often supported by the technical argument that a person cannot perform acts through an agent that they could not perform themselves, as well as the requirement for a meeting of the minds to form a contract.1
• Continental Legal Systems: These systems often prioritize the protection of parties acting in good faith. For instance, some jurisdictions may treat transactions as valid if the agent acts in ignorance of the principal’s death. Courts in these regions frequently focus on the good faith of the third party to determine the validity of the contract.1

The agency relationship can terminate by operation of law due to death, insanity, bankruptcy, or war.2