Cases - Kelly v Cooper

Record details

Name

Kelly v Cooper

Date

[1992]

Citation

3 WLR 936

Keywords

Estate agency

Summary

Agents were instructed by the plaintiff to sell a valuable piece of Bermudan real estate fronting the ocean. The agents had also been instructed, by another client, to sell the adjacent beach property. A wealthy American, Ross Perot, was shown around both properties. He offered to buy the adjacent property. He also expressed an interest in buying the plaintiff's property. Eventually Ross Perot and his family bought both properties. When the plaintiff discovered that Perot had bought both properties, he claimed that the agents should have disclosed Perot's intentions as this might well have resulted in a higher price. He claimed damages for loss of this higher price, and refused to pay the 5% commission.

The Privy Council found that there was no breach of duty by the agents as the information was received as agent for another client. It recognised that it is an estate agent's business to act for numerous principals and that, where properties are of a similar description, there will be a conflict of interest between the principals. Yet, despite this conflict, estate agents must be free to act for several competing principals, otherwise they would be unable to perform their function. In the process of acting for each principal, estate agents will acquire information confidential to that principal.

'It cannot be sensibly suggested that an estate agent is contractually bound to disclose to any one of his principals information which is confidential to another of his principals.'

In stating this, the Privy Council drew a comparison with the duty of a stockbroker not to disclose inside information confidentially disclosed to the broker by a company for which they act.