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On appeal from: [2016] EWCA Civ 1106

This appeal considered whether, where a commission agent and his principal have not expressly, in their oral discussions, identified and agreed the precise event upon which commission is payable, but have expressly agreed in those oral discussions that a commission would be payable at an agreed percentage, their bargain is incomplete. It also considered whether the court can (whether by taking into account the relevant surrounding factual matrix or what the parties said, or the parties’ conduct), imply a term identifying the commission entitling event which gives business efficacy to the parties’ presumed common intention.

The Supreme Court unanimously allowed the appeal. The Court considered that the question was whether, objectively assessed, the parties by their words and their conduct intended to create a legally binding relationship. Because courts are reluctant to find an agreement is too vague or uncertain to be enforced where it is found that the parties had the intention of being contractually bound and have acted on their agreement, the Supreme Court held that in this case it would naturally be understood that payment would become due on completion and made from the proceeds of sale. The Court considered it was therefore unnecessary for the judge to imply a term into the agreement between Mr Devani and Mr Wells. However, had it been necessary, the Court considered there would be no hesitation in holding that it was an implied term of the agreement that payment would fall due on completion of the purchase of the property by a person whom Mr Devani had introduced. The Court concluded that, although Mr Devani failed to comply with his obligation under the Estate Agents Act 1979, s 18 because he did not expressly inform Mr Wells of the event which would trigger his entitlement to commission, in the circumstances of this case, Mr Devani’s culpability was not so great as to justify dismissal of his application.

For judgment, please download: [2019] UKSC 4
For Court’s Press Summary, please download: Court’s Press Summary
For a non-PDF version of the judgment, please visit: BAILII

To watch the hearing, please visit: Supreme Court Website (11 Oct 2018 morning session)