A recent Court of Appeal decision on sole agency agreements will come as a blow to estate agents, says Michael Wilkinson
Determining when an estate agent is entitled to commission has long concerned estate agents, their clients, their lawyers and the courts. Before Foxtons v Pelky-Bicknell [2008] EWCA Civ 419, [2008] All ER (D) 328 (Apr), the position appeared to be relatively well settled. For a general agency agreement, ie one which does not contemplate limiting the seller to using only one agent, a term would generally be implied into the contract requiring that the agent “effectively cause” sale: if the agent does not cause sale, they will not be entitled to their commission (see Dashwood v Fleurets Limited [2007] EWHC 1610 (QB), [2007] All ER (D) 67 (Jul)).
For sole agency agreements (SSAs), however, the law did not require the same high degree of causation: commission was payable wherever the agent “introduced” a person who then purchased the property, regardless of how that introduction was made (see Murdoch, the law of Estate Agency, 4th Edition, Estates Gazette, pp 129–130). It was generally thought an “introduction”
