Cases - Luxor (Eastbourne) Ltd v Cooper
Record details
- Name
- Luxor (Eastbourne) Ltd v Cooper
- Date
- [1941]
- Citation
- 1 AC 108
- Legislation
- Keywords
- Estate agency - agent fees - commission
- Summary
-
The appellant companies wished to sell their cinemas and agreed to pay the respondent £10,000 commission on completion of the sale. The respondent introduced a willing and able purchaser, but the companies decided not to proceed with the sale. The respondent brought an action for breach of an implied term of the contract that the appellants would not, without just cause, act so as to prevent him earning his commission.
The House of Lords held that there was no such implied term. Terms are only implied in order to give business efficacy to a contract. Agents charge a high commission knowing that in some cases they will get nothing, particularly where multiple agents are employed. The risk of not obtaining any commission is part of the business. If the agent is not willing to run the risk they must include a clearly worded express term to protect them.
If, however, the principal had entered a binding contract with the buyer, then, in the view of Lord Russell of Killowen, a purchaser would have been introduced and commission would be due. Lord Wright expressed a similar view, although he stated that the principal would probably be in breach of the agency contract if he failed to complete.