Cases - Peter Long & Partners v Burns

Record details

Name

Peter Long & Partners v Burns

Date

[1956]

Citation

3 AII ER 445

Keywords

Estate agency - commission

Summary

The plaintiffs were engaged to sell the defendant's garage business. The agency agreement provided that commission was to be paid 'upon your introducing a person ready, willing and able to enter into a binding contract to purchase my business'. A prospective purchaser asked the agent if he knew of any town planning schemes. The agent, repeating information from the defendant, informed the prospective purchaser that some 2 or 3 feet would be taken from the front of the garage by the local authority. The prospective purchaser entered into a contract to buy the premises and paid a deposit. It transpired that the local authority's road widening scheme would necessitate the compulsory purchase of the bulk of the premises. So the prospective purchaser refused to complete. The agents claimed the commission on the basis that a binding contract had been entered into.

The Court of Appeal held that no binding contract had been made as it was not enforceable against the purchaser by reason of the agent's misrepresentation. Therefore no commission had been earned.

It was contended for the plaintiffs that, as the agent's statement was based on information provided by the defendant, it was the defendant's fault that the contract was not enforceable, and she should not be able to take advantage of that to deny liability to pay the commission. But the court held that, as the agent had not checked the statement he only had himself to blame. He must have known that, if the answer was incorrect, the sale could not go through.