I once wrote an article titled Breach of Agency Agreement, where I explained the relationship between the principal and the agent. A recap is therefore necessary to lay a foundation for the above subject matter. An agency agreement is the creation of a contract entered into by a mutual consent between a principal and an agent. A principal is a person that grants authority to an agent to act on behalf of and under the control and instructions of the principal. Therefore, the law governs and regulates the legal relationship in which an agent dealing with a third party for his/her principal.

The relationship between the agent and the principal is usually determined by both parties agreeing to the relationship. In the course of an agency relationship between the principal and the agent, it is a well-known fact that one of the duties of the principal is to pay remuneration to the agent depending on the agreement by both parties. But in a situation where the sale of the principal’s property has been sold by the principal himself and not the agent, and in the absent of a clear binding term in the agency agreement to that effect, the court will be reluctant to make the principal pay such agent commission over such property. Where the agent is to be paid commission in the event of him introducing a purchaser, it goes beyond just introducing the purchaser. Before an agent is entitled to a commission if he introduced a purchaser, such purchaser must not only be willing to purchase but also go as far as signing legal contract binding him after or before the purchase has been made. If this has not happened, the agent is not entitled to any commission.

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