Luxor (Eastbourne) Ltd v Cooper
There is no implied term in an estate agent's contract that the principal will not prevent the agent from earning commission by refusing to sell.
Facts
Mr Cooper, an estate agent, was engaged by the owners of two cinemas to find a buyer, and was to be paid a commission of £10,000 on completion of the sale. He found a buyer who was willing to pay the asking price, but the owners decided not to sell. Mr Cooper sued for the commission, or for damages, arguing that there was an implied term that the owners would not prevent him from earning it.
Legal principle
The House of Lords held that Mr Cooper was not entitled to the commission or damages. Lord Russell said that contracts with estate agents are of a special kind, under which the agent takes the risk of not earning his commission in return for the chance of a large reward, and that the principal is under no obligation to sell to the buyer introduced by the agent. A term would not be implied that the owners would not refuse to sell, because it was not necessary to give business efficacy to the contract. The commission was payable only on completion.
Related cases on agency
- Armagas Ltd v Mundogas SA (The Ocean Frost) [1986] AC 717
- Bolton Partners v Lambert (1889) 41 Ch D 295
- Collen v Wright (1857) 8 E & B 647
- De Bussche v Alt (1878) 8 Ch D 286
- First Energy (UK) Ltd v Hungarian International Bank Ltd [1993] 2 Lloyd's Rep 194
- Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480
- Hely-Hutchinson v Brayhead Ltd [1968] 1 QB 549
- Hippisley v Knee Brothers [1905] 1 KB 1
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