Cases - Sorrell v Finch

Record details

Name

Sorrell v Finch

Date

[1977]

Citation

AC 728

Keywords

Estate agency

Summary

Levy, an undischarged bankrupt, set up in business as an estate agent. He told prospective purchasers that, in order to get an option on a house, they would have to pay a deposit. In this way he got several deposits on each house and then absconded with the money. Finch had innocently appointed Levy as estate agent to sell his house but gave him no specific authority to accept deposits as his agent. Six prospective purchasers, including Sorrell, paid deposits to Levy. Sorrell sued Finch for the return of the lost deposit. The House of Lords held that there is no implied authority for an estate agent to hold a pre-contract deposit as agent for the vendor and overturned earlier Court of Appeal decisions to the contrary. Whether the agent describes themself as stakeholder or agent of the vendor is immaterial; they hold the deposit on behalf of the purchaser.