exclusive agency

An agency agreement by which a specified agent is appointed to sell (or otherwise dispose of) a property on the understanding that the principal will not enter into an agreement with any other agent in respect of the subject property (usually for a given period of time and/or in a given district). However, the agency may be exclusive or sole to that agent, but it does not preclude the principal from also seeking to find an interested party and, thereby, not being obliged to remunerate the agent for his services. In the UK, this arrangement is generally called a sole agency, as the agent is the 'sole' party appointed. An exclusive agency may be contrasted with an exclusive right to sell or sole selling right where the principal is liable to pay a commission even though he sells the property himself.

    In the event of a successful transaction, a payment is due to the appointed agent, even if the purchaser is introduced by another agent or broker (the assumption is that the 'exclusive agent' was appointed to negotiate with all prospective purchasers to the exclusion of other agents or brokers and in all probability would have concluded the 'bargain' with the taker). If the owner appoints another agent or broker during the term of an existing exclusive agency agreement and that agent or broker makes a sale, the principal may be obliged to pay both parties, or at least the appointed agent or broker may recover the commission he might have earned as damages and the principal will have to pay the second party whatsoever was agreed (Christie Owen & Davies Ltd v Rapacioli [1974] QB 781, [1974] 2 All ER 311 (CA); Charlotte Aircraft Corp. v. Prudue Airlines, Inc., 498 F.2d 152 (8th Cir. Ark 1974); Dean Vincent, Inc. v. Chef Joe's, Inc., 541 P.2d 969 (Or 1975)). On the other hand, if a transaction results directly from a contact and the efforts of the principal, the agent or broker is normally precluded from receiving any payment (Armstrong v. Lowe, 76 Cal 616, 18 P 258 (1888); Martin Realty Co. v. Fletcher, 103 NJL 294, 136 A 498 (1927); Joseph M. Silverman, Inc. v. Harrison, 498 A.2d 193 (DC App 1985); Gabrielli v. Cornazzani, 135 AD.2d 340, 525 NYS.2d 71 (1988); Bentall, Horsley and Baldry v Vicary [1931] 1 KB 253). However, if the agent procures a purchaser (or any other appropriate party to the transaction) who is ready, able and willing to proceed before the owner concludes his transaction, payment is due to the agent (E.P. Nelson & Co v Rolfe [1950] 1 KB 139 (CA); Anno: 64 ALR 395: Broker—Exclusive Agency Contract—Breach). In English law, in such an instance, it has been held that the agent may not be entitled to the same commission as if he had concluded the transaction unaided—the agent’s entitlement to commission depending on the precise terms of the appointment and the extent of the duties performed (Hampton and Sons Ltd v George [1939] 3 All ER 627).

    An 'exclusive agent' normally accepts that he will 'use his best endeavors' to sell, or otherwise dispose of the property as required by the principal, and is generally appointed for a fixed period of time. During the period of appointment he is responsible for marketing the property; negotiating with prospective purchasers; reporting fully to his principal; and, usually, making every effort to introduce a person who is 'ready, willing and able' (or a similar person) to acquire the property upon the terms agreed as acceptable to the principal. Also called a 'sole selling agency' or, in the US, an 'exclusive agency to sell' (Wilkins v. W. B. Tilton Real Estate & Insurance, Inc., 257 So.2d 573 (Fla App 1971)). Cf. exclusive right to sell^(AmE), multiple agency.  See also broker, exclusive listing^(AmE), listing^(AmE), quantum meruit.

Terms in bold are defined elsewhere in the Encyclopedia.
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