Property Choice Ltd v Fronda and another
Nicholls, Stuart-Smith, LJJ
Sole agency — Private purchaser introduced — Whether vendor consented to sell — Whether breach of sole agency term — Whether consent to sell includes pre-contract offers — Whether agents suffered damages — Appeal by vendors allowed
By an agreement which they signed the appellants appointed the respondent estate agents to sell their house. The agreement stated that the respondent were to act as sole agents and that the commission would be payable if the respondents introduce directly or indirectly a person ready, willing and able to purchase the house. Further, by clause 5 of the agreement until the expiration of the sole agency, the appellants agreed that they “will not consent to sell the property to anyone not introduced by [the respondents]”. The last sentence of clause 5 stated that “If this is contravened [the respondents] would be entitled to the same commission in the same circumstances as if we had effected an introduction.”
On February 14 1988 the respondents introduced a potential purchaser; on the same day a purchaser who was not introduced by them made an offer to the appellants. The appellants accepted the latter offer, but in the event no exchange of contracts took place. The respondents then issued proceedings claiming damages for breach of the sole agency term.
Sole agency — Private purchaser introduced — Whether vendor consented to sell — Whether breach of sole agency term — Whether consent to sell includes pre-contract offers — Whether agents suffered damages — Appeal by vendors allowedBy an agreement which they signed the appellants appointed the respondent estate agents to sell their house. The agreement stated that the respondent were to act as sole agents and that the commission would be payable if the respondents introduce directly or indirectly a person ready, willing and able to purchase the house. Further, by clause 5 of the agreement until the expiration of the sole agency, the appellants agreed that they “will not consent to sell the property to anyone not introduced by [the respondents]”. The last sentence of clause 5 stated that “If this is contravened [the respondents] would be entitled to the same commission in the same circumstances as if we had effected an introduction.”
On February 14 1988 the respondents introduced a potential purchaser; on the same day a purchaser who was not introduced by them made an offer to the appellants. The appellants accepted the latter offer, but in the event no exchange of contracts took place. The respondents then issued proceedings claiming damages for breach of the sole agency term.
The appellants appealed from the decision of Mr Recorder Coningsby QC in the Bromley County Court (October 12 1989), who held that the appellants were in breach of contract as they had consented to sell to the purchaser not introduced by the agents.
Held The appeal was allowed.
1. Where a vendor agrees that he will not consent to sell the property to anyone not introduced by the appointed agent, this is not confined to introductions by other agents and a breach occurs where the vendor himself introduces a person willing to purchase.
2. The expression “will not consent to sell” includes the situation where a purchaser not introduced by the agent has made an offer “subject to contract”.
3. However, if, as occurred, a purchaser is introduced by the vendor himself to whom he is willing and consents to sell in breach of the sole agency term, and that purchaser withdraws before an exchange of contracts, no commission is payable. None would have been payable had the agents introduced the purchaser and, although the respondents’ claim was for damages, they had suffered none.
Steven Whitaker (instructed by A J Bond & Co, of Bromley) appeared for the appellants; and Philip Cayford (instructed by Pritchard Joyce & Hinds, of Beckenham) appeared for the respondents.
