330 the enforceabilit y of promises

ireland

Commission agency contracts turn ‘in the main on the particular terms of the contract between the person who employs the agent and the agent’.39

In ascertaining whether the estate agent should be entitled to recover his commission and/or expenses the court will look primarily to the agreement made between the parties. In this instance, Homes was to receive ‘5 per cent of the sales price of the house if it found a buyer.’ On the facts as presented it is clear that Homes has not found a buyer.

In Fowler v. Bratt, Lord Evershed MR relied on the following statement of Lord Russell in Luxor (Eastbourne) Ltd. v. Cooper:40 ‘where there is a bargain whereby the agent has to find a purchaser, or introduce a purchaser, then the agent in order to earn the commission, must produce the result of a binding contract made between vendor and purchaser’. Applying the dicta of Lord Russell and Lord Romer in Luxor, it was held that in order to earn the commission, the plaintiff had to find a purchaser who was bound in law to buy. In that case the real estate agent was also instructed to ‘find a purchaser’ or buyer.

There was no agreement between the parties in respect of the expenses to be incurred by Homes in finding a buyer. In Murphy Buckley and Keogh v. Pye,41 the defendant vendors did not contest their liability to the plaintiff real estate agents for the money expended by them on advertising and so forth. However, it was clear from the facts of that case that the defendant had, prior to the advertising, agreed to specific expenditures being made in advertising the property in question. The plaintiffs were also found to be sole agents for the purposes of obtaining a purchaser of the property. An agreement such as that has clearly not taken place in Case 15.

The position of a real estate agent where no express agreement has been made with regard to the agency’s entitlement to expenses is unclear in Ireland. However, there is some authority for the proposition that a real estate agent would be entitled to recover expenses, despite the absence of an express agreement to that effect.42 In ascertaining whether the agent is entitled to his expenses, an Irish court might well take into account circumstances such as whether the principal was aware that the agent intended to, and actually did, incur outlay.

39Per Somervell LJ in Boots v. Christopher & Co. [1952] 1 KB 89.

40[1941] AC 105. It is to be noted that this case was cited as a precedent on a related issue

On the facts as presented it is possible that Homes might be entitled to recoup its expenses despite an absence of express agreement between the parties to that effect. However, if Homes could show that Claude was aware of possible expenditure to be incurred by Homes and any other such circumstances, then Homes would be in a far stronger position in seeking to recoup its expenses.

Whether it matters if the agency has found someone willing to buy depends upon the terms of the agreement between the parties. The agreement was to ‘find a buyer’. Lord Evershed MR found that the phrase ‘to find a purchaser’ meant that the agent had to produce for his principal a purchaser who was bound at law to buy.43

There has been no signed contract and the real estate agent is not entitled to insist upon the principal instituting proceedings for specific performance.44 In this regard, in accordance with the judgment in the Fowler case, Homes would not be entitled to the 5 per cent commission unless the behaviour of the parties was such as amounted to the purchaser being ‘bound at law to buy’. Accordingly, if proceedings for specific performance are taken and are successful, the real estate agent’s commission becomes payable.45

Again it is not clear whether Claude would be liable to Homes for its expenses for the reasons already discussed. However, the fact that Homes had found a buyer and that clearly their advertising costs and any other expenses involved had realized a buyer would strongly favour Homes when seeking to recoup any expenses incurred in an Irish court.

Irrespective of whether Homes was the sole agent for Claude or otherwise, unless Homes produces a buyer who was bound at law to buy, then Homes is not entitled to the commission.

In the Irish case of Murphy Buckley and Keogh v. Pye (I) Ltd46 the sale of a factory, the subject matter of the proceedings, had been effected privately by the vendors or defendants with a third party during the continuance of the term of sole agency of the real estate agent or plaintiff. The agents sought commission for the sale but were refused by Henchy J who held, inter alia, that the plaintiffs’ extensive exertions as sole agents had not played any effective part in effecting the sale of the factory to the purchaser.

The question as to whether Homes was the sole agent or not might be relevant in the context of expenses incurred. In Murphy Buckley and Keogh