NOTES OF CASES
| Date | 01 April 1941 |
| Published date | 01 April 1941 |
| DOI | http://doi.org/10.1111/j.1468-2230.1940.tb00781.x |
304
MODERN LAW REVIEW April,
1941
NOTES
OF
CASES
ReInunm~m
of
Agents
The
House
of Lords
in
Lwor
(Eastbourm),
Ltd.,
v.
Coopsr
(1941).
57
T.L.R.
213,
decided that the principal of a commission agent who
has
agreed to pay
him
on
completion of
the
transaction
is
not liable for
damages for breach of an implied term: not without reasonable cause
to
prevent the agent from earning
his
commission,
if
he refuses to sell to
a
purchaser able and willing to pay the price stipulated.
In
refusing
to
read
such a term into the contract the
House
of Lords has overruled
Trollope
v.
Mavtyn
(1g34),
2
K.B.
436,
where this implication was held necessary
by the majority of the Court of Appeal (Greer and Maugham.
L.
J
J.,
Scrutton,
L.
J.,
dissenting). A decision in favour of the principal might
have been reached without denying such implied term, either by finding
as
a matter of fact that the principal had reasonable grounds for
his
refusal to complete, as was done by the trial judge
;
or by holding generally
and
as
a matter of law that
a
principal cannot be considered to act
unreasonably towards
his
agent
if
he breaks off negotiations with an
intending purchaser before the conclusion of
a
binding contract. But
the
House
of Lords, in particular Lord Simon and Lord Wright;were
not content merely to vary the meaning of “reasonable cause” as part
of the alleged implied term. The d&culty of finding a satisfactory
test
to determine the existence of a reasonable cause led to doubts of the
existence of the implied term
itself.
Considering the high rate of com-
mission
usual in such contracts of agency by which the agent
will
obtain
in
one completed transaction fair compensation for unsuccessful attempts
;
considering the general readiness of principals to deal with any satisfactory
purchaser and the absence of all obligation
on
the part of the agent to
procure a purchaser, it appeared not only unnecessary but even unreason-
able to imply such
a
term. Moreover,
if
the implied
term
:
not to prevent
the agent from earning
his
commission, had been left intact, but the
reasonable causes permitting breach of the implied obligation had been
extended to allow for arbitrary refusal
to
complete.
it
might be thought
that the exception had eaten away the rule. Even then, however, there
would still remain certain implied obligations on the part of the principal
which Lord Simon collectively described
as
duties to co-operate. Thus, he
atlimed the existence of an implied obligation of the principal to permit
inspection of the property by the intending purchaser.
This
and similar
instances of the duty to co-operate can
no
longer be considered
as
applica-
tions of the general duty: not to prevent the agent from earning his
commission, as the existence of such a general implied duty has been
denied. They
will
now have to be specifically enumerated and read one by
one into contracts of agency. Doubts and litigation
arising
from
this
question are conceivable. But
it
seems a price worth paying for the settle-
ment of the far more important rules dealing with the remuneration of
agents which,
as
the Master of the Rolls pointed out in
Trollo@e
v.
Caplan
(1936),
2
K.B.
382,
at
p.
401,
were
in
an unsatisfactory condition. Estate
agents, the class of agents chiefly affected by the present decision,
will
share in the benefits of greater simplicity and
certainty
of the law, and,
as
it
will
remain open
to
them to restore by express provision the implied
rights which they have lost, their interests need not suffer
as
a conse-
quence
of
this case.
Their
claim
to
commission
after
a
binding contract
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