Cases - Dowling Kerr Ltd v Scott

Record details

Name

Dowling Kerr Ltd v Scott

Date

(1996)

Citation

EGCS 177

Keywords

Estate agency

Summary

The plaintiff agents entered into an agreement with the defendant to sell his business. The agreement contemplated a sale of the freehold or the grant of a 21-year lease at a premium.

The commission was to be due when 'either a sale is made to a purchaser under the terms of this Sole Selling Rights Agreement or a ready, willing and able purchaser is found'.

The amount of commission was calculated on the eventual 'sale price' of the business (however, apportioned between goodwill, fixtures and fittings) leasehold or freehold, at 4.5% for the freehold, and 6% for leaseholds plus 10% of the passing annual rent. The minimum fee was £3,000. No fees were to be charged on value of stock. The agency agreement granted the plaintiffs sole selling rights so, in accordance with the regulations, the statutory explanation was included in the contract. The agreement was for 6 months and continued thereafter until terminated by either side on 14 days' notice. During the continuation of the agreement, the defendant granted a 12-year lease of the property at an annual rent of £11,400 with no premium. Fixtures and fittings were sold for £1,300. Stock was sold for £1,700. When the plaintiffs found out about the lease, they claimed the minimum commission of £3,000.

The Court of Appeal held that there was 'no sale of the property for either of the interests which the contract evidently contemplated'. Therefore no commission was due.