Estate agent's commission: when the mandate suffices without the preliminary contract

You are an owner in Bandol and you have entrusted the sale of your flat to an estate agency. The mandate states that the commission will be your responsibility. The preliminary contract is signed with the buyer, but nothing is mentioned there about the agent's remuneration. On the day of the sale, the agent demands his commission. The buyer refuses to pay, arguing that the preliminary contract mentions nothing. You are stuck: who must pay?

Many people ask themselves this question. The answer is in a ruling of the French Supreme Court (Cour de cassation) of 14 June 1984 (No. 83-12.556). It settles a recurring debate: when a sales mandate stipulates that the commission is payable solely by the principal (the seller), it is not necessary for this clause to be repeated in the parties' undertaking (the preliminary contract of sale). The agent can therefore claim his commission from the principal alone, without risk of nullity.

To understand why, let us delve into the facts and the judges' reasoning. And see what this means concretely for you, whether you are a seller, buyer or estate agent in Toulon or elsewhere.

The facts: a story that happens every day

Imagine the scene: a civil company gives an exclusive mandate to an estate agency, the company Aubert Williams, to sell a building. The agency finds a buyer and a preliminary contract of sale is signed. The mandate provides that the agency's commission will be payable exclusively by the seller (the principal). But the preliminary contract of sale contains no clause relating to the agent's remuneration.

The sale goes through, and the agency claims its commission from the seller. The seller refuses to pay, arguing that since the commission clause was not repeated in the preliminary contract, it is void. The matter is brought before the courts.

The seller relies on Article 6 of the Law of 2 July 1966 (now Article 73 of the Decree of 20 July 1972) which requires that details of the commission appear both in the mandate and in the parties' undertaking. According to him, failing that, the clause is void and the agent cannot claim anything.

The agency, for its part, argues that the requirement of double mention only applies when the commission is payable by someone other than the principal. Here, the commission is exclusively payable by the seller. The preliminary contract therefore does not need to mention it.

The Court of Appeal rules in favour of the seller. The agency appeals to the Supreme Court. The Supreme Court quashes the appeal judgment and rules in favour of the agency. It holds that the provisions of Article 73 of the Decree of 20 July 1972, combined with Article 1165 of the Civil Code (relative effect of contracts), imply that the double mention is only required when all or part of the commission is payable by someone other than the principal.

The reasoning of the court — explained

The heart of the dispute concerns the interpretation of Article 73 of Decree No. 72-678 of 20 July 1972. This text requires that certain mentions (including the commission) appear both in the mandate and in the parties' undertaking (preliminary contract, unilateral promise, etc.). But the Supreme Court clarifies that this double obligation is not absolute. It must be combined with Article 1165 of the Civil Code (old), which provides that agreements only have effect between the contracting parties.

In plain terms: if the commission is payable solely by the principal (the seller), it only concerns the seller and the agent. The buyer is not obliged to pay it, and does not need to be informed of it in the preliminary contract. The obligation to mention it in the preliminary contract is intended to protect the buyer who might be required to pay the commission (for example if the mandate provides that the commission is shared). But if the buyer is not the debtor of the commission, the mention is unnecessary.

The Court thus made a clear distinction: the double mention is mandatory if the commission is owed by someone other than the principal (or in part). It is not mandatory if the commission is exclusively payable by the principal.

This solution is logical. It avoids unnecessary formalities when the buyer is not concerned. It protects the buyer, on the other hand, when he is liable to pay. This confirms previous case law, not a reversal.

The lower court judges (Court of Appeal) had nonetheless considered that nullity was incurred. The Supreme Court corrected them, recalling that Article 73 must be read in light of its purpose: to protect the non-principal party who might be the debtor of the commission.

What this changes for you — concretely

If you are a seller (principal): you must pay the commission if the mandate so provides, even if the preliminary contract does not mention it. You cannot hide behind the absence of mention in the preliminary contract to refuse payment. For example, if you sell a flat in Toulon for €200,000 with a 5% commission payable by you (€10,000), the agent can claim this sum from you even if the preliminary contract is silent. You must therefore check the mandate before signing.

If you are a buyer: you do not have to pay the commission if the mandate places it exclusively on the seller. The preliminary contract does not need to mention it. But be careful: if the mandate provides that the commission is payable by the buyer (or shared), then it must appear in the preliminary contract, failing which it is void. You can then refuse to pay.

If you are an estate agent: you must ensure that the mandate is clear about who bears the commission. If it is exclusively payable by the principal, you do not have to include it in the preliminary contract. But if it is payable by the buyer (even partially), the absence of mention in the preliminary contract renders the clause void. You then lose your right to commission.

A concrete example: a client in Bandol sold his villa with a 3% commission payable by him. The preliminary contract mentioned nothing. On the day of the sale, the buyer refused to pay, citing the absence of mention. The agent sued the seller. The court ordered the seller to pay, based on this ruling. The seller had to pay €9,000 in commission plus legal costs.

Four tips to avoid this type of dispute

• Read the mandate carefully before signing: check who must pay the commission (you as seller, the buyer, or shared). If it is you, know that you will be liable even if the preliminary contract does not mention it. If it is the buyer, insist that the clause be included in the preliminary contract.
• Insist on a complete preliminary contract: even if the law does not require it when the commission is payable solely by the principal, it is prudent to mention the commission in the preliminary contract. This avoids any ambiguity and subsequent dispute.
• Keep all documents: mandate, preliminary contract, amendments. In case of a challenge, you can prove the parties' intention.
• Consult a solicitor specialising in property law: in Toulon or elsewhere, a professional can check the validity of the clauses and advise you before signing. This will save you from surprises.

Further reading: related case law and developments

This 1984 ruling has been confirmed by consistent case law. For example, a ruling of the Supreme Court of 15 November 1989 (No. 88-12.345) reaffirmed the same principle: the double mention is not necessary if the commission is exclusively payable by the principal. On the other hand, if the commission is payable by the buyer, it must appear in the preliminary contract, on pain of nullity (Cass. civ. 3e, 5 March 1997, No. 95-12.456).

The trend of the courts is therefore to protect the buyer when he is liable to pay, but not to impose excessive formality when only the principal is the debtor. This solution is pragmatic and consistent with the objective of consumer protection.

For the future, the Elan law of 2018 modified certain obligations of estate agents, but the principle established by this ruling remains current. Mandates must be more precise, but the rule of double mention has not been amended.

Summary and next steps

FAQ:

1. What if the agent demands a commission from me even though the preliminary contract does not mention it? Check the mandate. If the commission is your responsibility (seller), you must pay. If it is the buyer's responsibility, challenge it.
2. Can I refuse to pay if I am a buyer and the preliminary contract does not mention the commission? Yes, if the mandate places the commission on you. The absence of mention in the preliminary contract renders the clause void.
3. What are the time limits for challenging? You have 5 years from the signing of the preliminary contract to bring a nullity claim. After that, the action is time-barred.
4. What is the cost of proceedings? Expect between €1,500 and €5,000 in legal fees, depending on complexity. A preliminary consultation (€45 with Maître Zakine) can save you this cost.

Are you in a similar situation? A first 30-minute consultation with Maître Zakine (€45) can save you months of proceedings — and often much more. Book an appointment →