Ending EA contract early

evoke

If you're unhappy with an EA and, by mutual agreement, you and the EA end the contract early in writing, then do the original terms of the contract apply after the contract has been terminated early? Or is the contract itself declared null and void?

G_M

I guess it depends precisely what you agree 'by mutual agreement' !

What have you in mind?

evoke

If the EA agrees that he can't sell your property and agrees to end the contract early because you haven't been happy with the service. Would you still be bound by the terms of the contract even if the contract hasn't run its course?

G_M

I am still unclear what terms you think you might be bound by? Normally your main obligation is to pay a commission based on sale price when a buyer is introduced. If this has not happened, then what might you be bound to do under the contract?

Occassionally there's a deal over a 'free' EPC or similar, with payment only due if you cancel the contract before a buyer is introduced. If this is the case, ensure it is discussed/agreed as part of the 'mutual' cancellation of the contract.

evoke

My question is whether the contract itself is declared null and void if cancelled early by mutual agreement. To try and explain this another way: if a contract runs its term then the contract still stands as a contract and all the things you have mentioned still apply. If a contract with an EA is terminated early then is the contract declared null and void as it has been terminated early by mutual consent?

Suppose it was a sole agreement. The original EA stipulates a percentage fee based on sole agency and the contract runs for, say, 4 months. During this time I cannot ask another EA to market my property as the contract with the original EA is for sole agency (unless I change that contract to multi-agency). The contract with the EA is ended early and the EA verifies this in writing. In this case the sole agency restriction of the original contract simply doesn't apply as the contract has technically been declared null and void (as it has not run its term). This allows me to appoint new EAs with new contracts.

So, do any other parts of the original contract with the original EA still apply from a legal point of view?

eanick

I would imagine that most agents would consider that the contract ending early by mutual consent would only end the contract at that point - anything that happened during the term that the contract was in place would still be enforceable. I.E ending the contract early would not, for example, absolve you from paying a fee fort the agent introducing a buyer that was introduced during the period prior to cancellation.

If I have got the wrong end of the stick please forgive me!

DVardysShadow

evoke wrote: »

So, do any other parts of the original contract with the original EA still apply from a legal point of view?

You get a billion viewers and no offers. So you terminate the contract. Suddenly viewer no 99,986 comes up with an offer you accept. Because this viewer was originally introduced by the agent within the term of the contract, you would have to pay the agreed commission. In this sense, the contract is never null and void. Terminated is probably the best word for it - it has an end put on it - but if anything crops up from before the end, the contract can still apply.

As part of the termination, you should ask the agent to provide an exhaustive list of all introductions they have made - set a time limit of 21 days - and make the request in writing, keeping a copy.

Quite probably, they will not respond - but it makes their case much harder for them if they did not respond and you accept an offer from someone they did introduce.

G_M

Reading between the lines (and forgive me if I'm doing you an injustice) I suspect you have a buyer in mind, who was introduced by the EA.

You have discussed a 'private deal' with said buyer.

You are considering getting the EA to declare the contract null and void so that you can then proceed with the buyer they introduced without the threat of a subsequent EA fee being charged.

As DVS says above, I doubt this would work since although the contract has been terminated, the buyer was introduced during the period of the contract, so if/when the EA checked the Land Reg (which they do) and saw the name of the buyer, a bill would follow.

evoke

No, the situation is that my property is sold. However, someone who viewed it with a previous EA wants to make a higher offer. He never made any offer with a previous EA so he can only go through one of the current EAs. I've said no but the new potential buyer has upped his offer by a huge amount as he's really keen to buy. I basically don't want to pay two EA fees and don't want to get into a legal mess. The current EA says it should not be an issue as the contract with the previous EA is null and void due to it having ended early by mutual consent. I'm not 100% sure, hence why i'm asking.

G_M

The current EA says it should not be an issue as the contract with the previous EA is null and void

Let me see. Current agent will get the fee for the new buyer who was introduced by old EA so tells you 'It's no problem' ....:rotfl:

Start getting the two agents to negotiate and get a written agreement that they share the fee. EA 1 will want his cut!

sonastin

There are a number of ways of bringing a contract to an end. From the info you've give, that suggests that the contract has been terminated. From a basic contract law point of view, this means that if something was done during the period that the contract was in force that would require something to be done in response and you don't do that thing you should do in response, you will be in breach of contract and they have 6 years to initiate a claim for that breach. e.g. if they introduce a buyer to the property during the term of the contract, you are required to pay them a fee in response. Even if the purchase is concluded after the contract is terminated, you still owe the fee for the introduction.

In this respect, all of the clauses of the contract still apply in so far as they relate to actions that were started while the contract was in existence. Depending on how the contract was terminated (or what was written in it in the first place), other conditions can "survive termination". Contracts which include confidentiality clauses often stipulate these clauses carry on even if the contract is brought to an end. In the example given of a sole agent, if the agent specifies that the exclusion of other agents will survive termination then the 4 month period would continue even if the contract was terminated. If that wasn't specified, it wouldn't and you'd be free to engage another agent before the 4 months is up. So its all down to the wording of the original contract and the termination agreement as to what actually remains in force once you've agreed to end the relationship.