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Supreme Court finds that agreement valid despite lacking ‘essential’ term

The Supreme Court reached a unanimous decision in that a seller and an estate agent had a valid agreement despite the parties not having identified when the agent’s commission would become due.This overturned the Court of Appeal’s decision that the contact was invalid for lack of what it considered to be an essential term – the court unable to imply a term that would have altered an incomplete bargain between the parties.

In a pragmatic ruling, the Supreme Court found that the words and conduct of the parties could be interpreted to mean that the commission was payable on the sale of the property if the buyer had been introduced to the seller by the agent.

These proceedings underline that the court’s reluctance to interfere in private agreements. On one hand there is a risk that the court will find an agreement unenforceable, or, alternatively, imply a term into the agreement that the parties did not intend. In order to avoid this risk, parties should make sure that all desired terms are expressly agreed in writing in so far as possible.

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