LEGAL PRINCIPLE: COMMERCIAL LAW – Estate Agents – Authority to Sell Land – Express Authority Required
PRINCIPLE STATEMENT
When a vendor merely authorises a house agent to sell at a stated price he must not be taken to be authorising the agent to do more than agree the price with an intending purchaser. The making of a contract is not part of an estate agent's business, and, although, on the facts of an individual case, the principal may authorise him to make a contract, such an authorisation is not lightly to be inferred from vague or ambiguous language.
RATIO DECIDENDI (SOURCE)
Per Ejiwunmi, JSC, in Incar Nigeria Plc & Anor v. Bolex Enterprises (Nig.) (2001) NLC-501996(SC) at p. 31; Paras B–C.
"When a vendor merely authorises a house agent to sell at a stated price he must not be taken to be authorising the agent to do more than agree the price with an intending purchaser. The making of a contract is not part of an estate agent's business, and, although, on the facts of an individual case, the principal may authorise him to make a contract, such an authorisation is not lightly to be inferred from vague or ambiguous language."
EXPLANATION / SCOPE
Authority to sell at a stated price does not authorise the agent to make a binding contract. Making a contract is not part of an estate agent’s usual business. Express authority to make a contract must be clearly given—not lightly inferred from vague language. The agent’s role is to find a purchaser and negotiate price, not to conclude the transaction. The principal must execute the contract. The principle protects vendors from being bound by unauthorised agreements. Third parties must ensure the agent has express authority to contract. Vague or ambiguous language is insufficient to confer contracting authority. The agent exceeding authority acts at their own risk.
