Foxtons were sole agents for O’Reardon in respect of the sale of a £2.5m property. Foxtons introduced a purchaser. O’Reardon and the purchaser exchanged contracts for the sale, but the purchaser pulled out and completion did not take place. The property was later sold to someone in respect of whom Foxtons had no relationship. Foxtons claimed commission in respect of the original exchange of contracts but O’Reardon said it was not due.
The High Court ruled that, based on Foxtons’ terms and conditions, all Foxtons had to do to receive commission was for there to be an unconditional exchange of contract with the purchaser. As that had happened, it was entitled to commission, even though completion did not take place.
Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: “Following this case, estate agents should check their terms and conditions to make sure that they are entitled to commission should there be exchange of contracts but no completion.”
