House or Estate Agent

 

House or Estate Agent:

A house or estate agent is in a different position from a broker at the stock exchange owing to the peculiarities of the property with which he is to deal which does not pass by a short instrument as stocks and shares do but has to be transferred after investigation of title as to which various special stipulations, which might be of particular concern to the owner, may have to be inserted in a concluded contract relating to such property. - Kekewich J. in Chadburn v. Moore [ 67 L.T. 257.] [1]

The parties therefore do not ordinarily contemplate that the agent should have the authority to complete the transaction in such cases. That is why it has been held, both in England and here, that authority given to a broker to negotiate a sale and find a purchaser, without furnishing him with all the terms, means "to find a man willing to become a purchaser and not to find him and make him a purchaser"[1]

Where a contract is concluded with the purchaser, the event has happened upon the occurrence of which a right to the promised commission has become vested in the agent. From that moment no act or omission by the principal can deprive the agent of his vested right. [1]

If a buyer is ensured, he is said to be secured and no buyer can be said to be ensured till he is bound by his offer and that cannot happen unless it stands accepted. The agent could only secure a buyer in the strict sense of the term if he had authority to enter into a binding contract. The word "buyer" when used in a strict sense also means "a person who has actually made the purchase" The authority given to an agent to secure a buyer therefore gives him authority to enter into a binding contract of sale with him. Without such an authority it was not possible to secure a buyer.[1]

Authorizing a man to sell means an authority to conclude a sale; authorizing him to find a purchaser means less than that. It means to find a man willing to become a purchaser, not to find him and also make him a purchaser.[1]

The general rule of law, as to commissions, undoubtedly is, that the whole service or duty must be performed, before the right to any commissions attaches, either ordinary or extraordinary; for an agent must complete the thing required of him, before he is entitled to charge for it. In the case of brokers employed to sell real estate, it is well settled that they are entitled to their commission when they have found a purchaser, even though the negotiations are conducted and concluded by the principal himself; and also where there is a failure to complete the sale in consequence of a defect in title and no fault on the part of the brokers.[1] - Willes J. in Inchbald v. Western Neilgherry Coffee etc. Co. [17 C.B. (N.S.) 733].

References:

[1] Abdulla Ahmed vs Animendra Kissen Mitter [1950 AIR 15]

Note: This blog comprises of case commentaries based on the judgments listed under the heading "Reference". The opinions and comments of the sitting judges in those cases are copies word to word in this blog for sake of knowledge only.

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