Promise of Sale Without Meeting: When the Estate Agent Collects the Commission in Advance

You have signed a preliminary contract of sale at an estate agent's office, without even having met the seller. Then, for one reason or another, the sale falls through. The agent demands his commission, which he collected in advance. Can you get it back? This was the question facing a homeowner in Biscarrosse, who had entrusted the sale of his house to an agency, without ever meeting the buyer. The Court of Cassation, in a judgment of 26 January 1977, ruled: the commission is earned by the agent upon signature of the preliminary contract, even if the parties have not met, and even if the sale does not go through. A decision that is still debated today.

The Facts: A Story That Happens Every Day

Mr D., owner of a house in Capbreton, entrusts the sale to an estate agency. The agent finds a buyer, but for various reasons the two parties never meet. The agent has each of them sign a separate preliminary contract, signed in blank for some documents. The agent collects his commission in advance. The sale does not go through. Mr D. demands a refund of the commission. The agent refuses, claiming he has performed his mission by bringing the parties together. The dispute goes all the way to the Court of Cassation, which must determine whether the commission is due upon the promise of sale, even in the absence of a meeting and the completion of the sale.

The Reasoning of the Court — Analysed

The Court of Cassation relies on Article 1134 of the Civil Code (old, now Article 1103) — the binding force of contracts. It considers that the preliminary contract of sale signed by both parties, even without meeting, constitutes a valid contract. The agent has fulfilled his mission of bringing the parties together. His commission is therefore due upon signature of the preliminary contract, unless otherwise agreed. The Court rejects Mr D.'s argument that the commission would only be due upon completion of the sale. This confirms previous case law: the agent is entitled to his remuneration as soon as he has found a buyer accepting the conditions, even if the sale subsequently falls through.

What This Means for You — Practically

If you are a seller: you must be vigilant about the terms of the agency agreement. If the agent collects the commission in advance, and the sale does not go through, you risk not getting it back. Example: in Biscarrosse, a 6% commission on a property at €300,000, i.e. €18,000, lost if the sale falls through. If you are a buyer: be wary of preliminary contracts signed without having seen the seller. Check the conditions for refund of the commission. If you are an estate agent: this judgment supports you, but remember to draft your agency agreements and preliminary contracts carefully to avoid any dispute. A client recently consulted me for a similar case in Capbreton: the sale failed due to a refused loan, the agent kept the commission. We negotiated an amicable settlement.

Four Tips to Avoid This Type of Dispute

• Read the agency agreement and preliminary contract carefully: check the conditions for payment of the commission. If it is due upon the promise, negotiate payment upon completion of the sale.
• Meet the other party: even if not mandatory, a meeting helps clarify intentions and avoid misunderstandings.
• Have a suspensive clause drafted: provide that the commission is only due if the sale is completed by notarial deed. This is protection against contingencies.
• Keep all documents: agency agreement, preliminary contract, emails, proof of payment. In case of a dispute, you will have evidence to support your case.

Further Reading: Related Case Law and Developments

This 1977 decision is part of a consistent line: the Court of Cassation protects the agent's right to commission as soon as he has performed his mission of bringing the parties together. A later judgment, of 11 May 1993 (No. 90-21.123), specified that the commission is due even if the sale fails due to the fault of the seller or buyer. On the other hand, if the preliminary contract is void (e.g. for lack of consent), the commission is not due. The courts are increasingly attentive to the validity of the preliminary contract and the reality of the agent's mission. This trend means that agents must be more rigorous in their practices, at the risk of losing their remuneration.

Summary and Next Steps

FAQ:

• Can I get my commission back if the sale does not go through? No, unless the preliminary contract provides for a refund clause. Check your documents.
• What to do if the agent refuses to refund? Send a formal notice, then take the matter to the judicial court. Prior consultation is recommended.
• Do I have to meet the other party? This is not a legal obligation, but it is a useful precaution to avoid disputes.
• What are the time limits for taking action? In matters of commission, the limitation period is 5 years (general law period).

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