A substantial property developer sought a tenant for its office block and agreed with his selling agent to pay ‘a full scale letting fee . . should you introduce a tenant by whom you are unable to be retained and with whom we have not been in previous communication and who subsequently completes a lease.’ There was an introduction but, after a number of months, a lease was completed by a company in respect of whose introduction the personnel in Fairview had no recollection, the tenant having been procured by other means.
Held: The agent was not an effective cause of the tenancy but the fee was payable. The court refused to imply the usual term requiring that the agent play an effective part was that an introduction was all that Fairview wanted; they had their own employers and lawyers who could do all the subsequent work and no further work after the introduction was expected of the agent. Woolf LJ thought the implied term would avoid the possibility of the client paying commission to more than one agent each of whom might be said to have ‘introduced’ a purchaser or lessee but only one of whom could be said to be the effective cause of the transaction, and said: ‘In a case where there are no express qualifications to be fulfilled other than that a purchaser should be introduced by the estate agent, then the need to imply a term as to effective cause can be readily appreciated, since otherwise if the vendor engages more than one agent there will be no way in which he can avoid being faced with an obligation to meet the claim for commission of more than one agent who each introduced the tenant. However, in this case there is virtually no danger of this happening because of the words ‘with whom we have not been in previous communication.’
Judges:
Woolf LJ
Citations:
[1987] EGLR 18
Jurisdiction:
England and Wales
Cited by:
Cited – The County Homesearch Company (Thames and Chilterns) Ltd v Cowham CA 31-Jan-2008
The defendants contracted to pay estate agents to find them a house. They completed the purchase of a property mentioned to them three times by the agent, but now appealed from a finding that they were obliged to pay his commission. The judge found . .
Cited – Foxtons Ltd v Pelkey Bicknell and Another CA 23-Apr-2008
The defendant appealed against a finding that she was liable to pay her estate agent, appointed as sole agent, on the sale of her property. The eventual purchasers had visited but rejected the property. The agency was later terminated, and the . .
Lists of cited by and citing cases may be incomplete.
Agency, Contract
Updated: 23 March 2022; Ref: scu.264094
