Estate Agent Clause Interpretation

Seller

Hi
My contract with my estate agent has the following clause, which seems to me to be ambiguous:

Sole Agency - The Client will be liable to pay commission to the Agent, in addition to any other costs or charges agreed, if at any time during this agreement or six months thereafter unconditional contracts for the sale of the property are exchanged with a purchaser introduced by:
A) The agent during that period of its sole agency or with whom the agent had negotiations about the property during that period
or
by another agent during that period.

My question is which "that period" is being referred to in B? Is it the contractual period of sole agency only or does it include the six months thereafter?
How do you interpret this?
Can I safely engage new agent in the six months following the termination of this contract without having to pay 2 sets of fees if my current agent has not introduced me to the buyer found by the new agent?

eddddy

It's a very standard EA contract.

Maybe it will be easier to understand with an example.

Let's say your contract started with the EA1 on 1st June 2018 and finishes on 1st Oct 2018.

• If Mr X was introduced by EA1 between 1st June and 1st Oct - and Mr X goes on to buy anytime before 1st April 2019 - you have to pay EA1 a fee.

• Or if Mr Y was introduced by any other EA between 1st June and 1st Oct - and Mr Y goes on to buy anytime before 1st April 2019 - you have to pay the EA1 a fee.

If Mr Z is introduced after 1st Oct 2018 (by anyone) - and Mr Z goes on to buy, you don't have to pay EA1 a fee.

stator

You're right it is ambiguos but would be interpreted by everyone that "That period" refers to the dates covered by the sole agency contract only and not the 6 months thereafter.

AnotherJoe

It doesn't read that simply to me eddddy and I think the OP is right to be concerned.
I would suggest amending it to make it clear the six months following only applies to purchasers introduced during the period of the contract. And I would also write in that if the contract period ends without a sale, the EA is to provide the definitive list of potential purchasers to who this six month clause would apply.

steampowered

I read the words "that period" as referring to "at any time during this agreement or six months thereafter".

The reference to a 6 month period would be redundant if it did not apply to bullet points (A) and (B).

It seems to me that you would be liable for 2 sets of fees if a new EA sold the property within 6 months after terminating your contract with the first EA.

This is an unfortunate position to be in if you want to sack the first EA and don't want to wait 6 months, but I don't really see how the clause could be read differently.

stator

steampowered wrote: »

I read the words "that period" as referring to "at any time during this agreement or six months thereafter".

The reference to a 6 month period would be redundant if it did not apply to bullet points (A) and (B).

It seems to me that you would be liable for 2 sets of fees if a new EA sold the property within 6 months after terminating your contract with the first EA.

This is an unfortunate position to be in if you want to sack the first EA and don't want to wait 6 months, but I don't really see how the clause could be read differently.

No way the courts would interpret it that way though.
It would clearly be unreasonable to expect a fee for a sale where the buyer was found by another EA 3 months after the original EA was terminated.

steampowered

stator wrote: »

No way the courts would interpret it that way though.
It would clearly be unreasonable to expect a fee for a sale where the buyer was found by another EA 3 months after the original EA was terminated.

I understand what you are saying, but generally the courts will interpret a contract based on what it says.

The courts won't change a contract to say something different just because the judge thinks it would have been fairer for the contract to say something else.

I agree that it is unreasonable for the EA to ask for a fee for a sale that happens through a different EA up to 6 months after they were terminated. But to me that is what the contract says.

There is a piece of legislation called the Unfair Terms in Consumer Contracts Regulations 1999. This says that if a contract term is "unfair" within the specific definition given those regulations, the term will be unenforceable.

This legislation was successfully used in a case brought by the OFT against Foxtons which found that some of Foxtons' terms about continuing to receive letting commission after landlords terminated their contract were unfair.

The Op could certainly try a similar argument if the second EA claimed their fee. But they may or may not win. I am not aware of any cases where someone has successfully used the Unfair Terms Regulations to challenge a commission clause in a case like this one, so it would be a gamble.

Personally in the Op's situation I would not proceed for 6 months unless I was happy to take the risk of the first EA claiming a fee. If I did proceed I'd keep quiet about it and hope the first EA doesn't notice. It may come to nothing but there is a real risk, lots of EAs troll through land registry records for their old listings and use no-win-no-fee type outfits to try and claim fees.

Comms69

Agreed with SteamPowered, it suggests the fee is payable for any introduction by another agent in the 6 months thereafter.


The ambiguous point is actually whether a friend etc would be considered an agent.

TBagpuss

I think Eddy's interpretation is the correct one but if you are concerned then you could amend it by hand to read "B) by another agent during [agent's name] sole agency"

Or e-mail them to ask them to confirm that you are correct in understanding that the wording ' that period' mean the period of their sole agency. If they confirm it, then in the even of any dispute you have proof of how it should be read.

I agree with the recommendation to ask, at the end of the 6 months, so a definitive list of all potential buyers that they have introduced.

chalky_white_2

Ask them (in writing) and get their response in writing.

You can rely on what is advised, as long as they are clear.

stator

steampowered wrote: »

I understand what you are saying, but generally the courts will interpret a contract based on what it says.

The courts won't change a contract to say something different just because the judge thinks it would have been fairer for the contract to say something else.
.

It's an ambiguous contract, the courts would interpret what is most likely to have been meant, and what is reasonable. In a consumer vs business relationship, they generally use the interpretation that is most favourable to the consumer who didn't draw up the contract.



Obviously if an EA introduces a buyer and they buy the house after the EA is terminated, they are entitled to their fee. That is clearly the purpose of this clause in the contract.



If the EA is terminated and has no relationship with the eventual buyer, there is no possible justification for the fee.



And whilst American courts may interpret contracts and laws to the letter, worrying about a full stop vs comma here or there and what is the meaning of this; the UK courts are much more interested in what the intention of the contract is, and will interpret things how they see fit.