The Hagues, husband and wife, owned a 160-acre tract that they decided to sell. They entered 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 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 Hilgendorf. Hilgendorf did not acquiesce to the Hagues' termination, however. One month later, Hilgendorf presented an offer to the Hagues from a 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 the Hagues for breach of the agency agreement. Hilgendorf v. Hague, 293 N.W.2d 272, 1980 Iowa Sup. Lexis 882 (Supreme Court of Iowa)

1. Does a principal have the power to terminate an agency? Does a principal have a right to terminate an agency? Explain.
2. Did the Hagues act ethically in this case?
3. Do you agree with the outcome of the case? Why or why not?