Cases - Egan Lawson Ltd v Standard Life Assurance Co

Record details

Name
Egan Lawson Ltd v Standard Life Assurance Co
Date
[2000]; [2001]
Citation
EWCA Civ 293; 1 EGLR 27
Keywords
Estate agency - commission
Summary

A non-retained agent wrote to the defendant providing information about a property that was coming on the market. The letter said: 'I look forward to discussing the matter further and confirm that we would wish to act for you for a fee based on one per cent of the purchase price plus VAT'. The defendant was not interested as the price was too high.

After the property was formally marketed in October by Savills, the retained agent, Richard Ellis approached the defendant and provided details about the property. Richard Ellis also provided a purchase report for the defendant and submitted a lower offer than the asking price. A sale was completed and the defendant agreed to pay Richard Ellis commission of 1%. The plaintiffs sought commission, but their claim was rejected by the Court of Appeal. It was held that the transaction had nothing to do with the plaintiffs' introduction and would have occurred had there been no introduction by them at all.

Commenting on the nature of the agreement in this case, Lord Justice Simon Brown distinguished between a case where a vendor instructs agents and a case such as this where the agent is asking to be instructed. It is, he said, entirely a matter for the purchaser as to whether to contract with the agent and, if so, on what terms. In the absence of clear terms, one could not regard the prospective purchaser as agreeing to pay a fee, provided only that they eventually purchase the property in question; the standard basis upon which a vendor instructs their agent to find a purchaser. In his view, even if the second agent were not entitled to commission (he doubted that they were, although eventually the defendant agreed to pay commission) it would have made no difference to the plaintiffs' claim.