EAA Publications
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| The Freshman |
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| It is unacceptable to coax
the client into signing an agreement |
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The least an estate agent
can do is to be honest with his client and carry out the client's
instructions in good faith. An agent should not, and must not,
take advantage of the client's trust in him to do something
against the client's instructions or even damaging the client's
interests.
When putting up his property for sale through an estate agency,
A Co, Mr Chan, the owner, clearly instructed that the property
would not be sold for less than $6 million. Sometime after that,
Mr Chan was away from Hong Kong on business, and he gave a power
of attorney to his wife for dealing with the sale of the property.
It so happened that a buyer offered $5.8 million for his property.
Y, the salesperson handling the deal at A Co, was new to the
trade and was rather unmindful of consequences. Clearly knowing
that the offer fell short of Mr Chan's instruction, he nonetheless
contacted Mrs Chan and alleged that Mr Chan had instructed him
that $5.8 million was acceptable. He told Mrs Chan that such
an offer was not to be missed and urged Mrs Chan to sign a provisional
agreement for sale and purchase on behalf of her husband as
quickly as possible, lest the buyer should change his mind.
Mrs Chan tried to contact her husband but failed. Unwary of
any fraud, she signed a provisional agreement for sale and purchase
on behalf of her husband.
On returning to Hong Kong, Mr Chan learned about the deal and
instantly felt cheated. However, it was only after he had complained
to A Co that the management learned that Y had acted against
the client's instructions. By then, Y had left the job and could
not be found. Mr Chan would prefer to cancel the provisional
agreement for sale and purchase, but the buyer insisted that
any non-performance would be treated as repudiation. To avoid
troubles, Mr Chan had no choice but to sell the property at
the lowered price.
In the above case, it was clear that Y had breached his duty
towards the owner in failing to carry out his instructions.
At the same time, he made a misrepresentation to Mrs Chan to
induce her into signing the agreement on behalf of her husband,
which was something a professional and responsible agent should
never do. On the other hand, Mrs Chan should not have signed
the provisional agreement for sale and purchase before confirming
with her husband on the price and other conditions as the provisional
agreement for sale and purchase had binding effect.
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