Contemporary Canadian Business Law: Principles and Cases Tenth Edition Cases
Contemporary Canadian Business Law: Principles and Cases Tenth Edition
Chapter 15: Case 9
Case 9 deals with a homeowner (the principle) who lists her property for sale and enters into an agreement with an agent to facilitate a sale with a third party. Over the course of the agency agreement a prospective buyer inspected the property but didn’t make an offer before the agency agreement expired. The legal issue that arises comes after the agency agreement expires. The prospective buyer later decided to put in an offer, which was accepted, but once discovering that the agreement between the principle and agent had expired brought legal action against the agent.
The nature of the buyer’s actions in my opinion could be considered abnormal. The expiration of the agency agreement between the principle and the agent doesn’t have much bearing on his decision to place an offer on the house. The buyer indicated his interest in the house when he inspected the property and would have become aware of the disclosed agency at that time, so the fact that the agency agreement was expired at the time the offer was made is irrelevant.
If anyone was to have a problem with the fact that the offer was accepted after the expiration of the agency agreement expired it should be the principle, depending on the situation. While the agreement may have expired the principle may have indicated through her actions that they would like the relationship to continue without signing a new agreement. Without the principle notifying potential third parties that the agent no longer had the authority to bind the parties, the agent was completely within their rights to accept the offer.
The property owner would be able to ratify the agreement assuming that at the time the offer was accepted it was an agency of conduct that existed between her and the agent. If agency of conduct wasn’t the case and the principle had made it known to potential third parties that the agent no longer had the
Chapter 15: Case 9
Case 9 deals with a homeowner (the principle) who lists her property for sale and enters into an agreement with an agent to facilitate a sale with a third party. Over the course of the agency agreement a prospective buyer inspected the property but didn’t make an offer before the agency agreement expired. The legal issue that arises comes after the agency agreement expires. The prospective buyer later decided to put in an offer, which was accepted, but once discovering that the agreement between the principle and agent had expired brought legal action against the agent.
The nature of the buyer’s actions in my opinion could be considered abnormal. The expiration of the agency agreement between the principle and the agent doesn’t have much bearing on his decision to place an offer on the house. The buyer indicated his interest in the house when he inspected the property and would have become aware of the disclosed agency at that time, so the fact that the agency agreement was expired at the time the offer was made is irrelevant.
If anyone was to have a problem with the fact that the offer was accepted after the expiration of the agency agreement expired it should be the principle, depending on the situation. While the agreement may have expired the principle may have indicated through her actions that they would like the relationship to continue without signing a new agreement. Without the principle notifying potential third parties that the agent no longer had the authority to bind the parties, the agent was completely within their rights to accept the offer.
The property owner would be able to ratify the agreement assuming that at the time the offer was accepted it was an agency of conduct that existed between her and the agent. If agency of conduct wasn’t the case and the principle had made it known to potential third parties that the agent no longer had the