The estate agency agreement operates between the estate agent
A worked RES examination question on prescribed estate agency forms, from our Paper 1 bank — with the rule it turns on, and why each of the four options is right or wrong.
The question
An estate agency agreement is signed for a property. A newly joined administrator filing the paperwork notices that the form names the firm at the top but that the only signatures on it are those of the client and of the salesperson who took the instruction. She had assumed the agreement operated between those two, since they are the two who signed it and the two who have dealt with each other throughout the marketing, and she asks her supervisor whether the firm's name at the top of the page is simply letterhead.
Which statement is correct?
The answer, and why
Answer: A
The rule. The estate agency agreement operates between the estate agent — the licensed firm — and the client. The salesperson signs for the firm but is not a party in his own right.
Why A is correct. Firm and client are the parties.
The other options.
- B makes the salesperson a party.
- C relegates the client to a third party.
- D makes all three parties.
Exam note. Only the licensed firm may hold the appointment, which is why only the firm may charge.
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