Wells v Devani

Mr Wells had completed a block of flats but still had seven to sell. A neighbour told Mr Devani about them. Mr Devani then called Mr Wells and soon introduced Newlon Housing Trust.

Their accounts of the call differed. Mr Devani said he explained that he was an estate agent and charged two per cent plus VAT. Mr Wells said commission was not mentioned. The trial judge accepted that a commission agreement had been reached.

The Court of Appeal had treated the agreement as incomplete because the parties did not expressly say when commission became payable. The Supreme Court took a practical, objective view of the exchange.

An estate agent agreed to find a buyer for a stated commission. In that setting, payment on completion from the sale proceeds was naturally understood. If an implied term had been needed, the Court would have implied that limited term to make the agreement work.

The Estate Agents Act required the agent to give the client specified information before the contract or as soon as reasonably practicable. Mr Devani did not provide the payment-trigger information at the outset and did not put the terms in writing until after the introduction.

The breach did not make dismissal of the whole fee claim proportionate on these facts. The trial judge had instead reduced the award by one third. The Supreme Court dismissed Mr Wells' cross-appeal and left that reduction in place.

Referral and commission arrangements often begin informally because an opportunity is time-sensitive. A short written confirmation can preserve that speed without leaving the core bargain uncertain.

Identify the customer or opportunity, the introduction required, the success event and the fee calculation. Deal with existing contacts, multiple introducers, group-company sales, delayed completion and transactions completed after termination.