effective cause of sale - agency

Under the normal agency agreement an agent is only entitled to commission if the agent is the effective cause of sale. The sale must result wholly or partly from the efforts of the agent. The introduction of the ultimate purchaser is usually sufficient. There must be a contractual relationship between the agent and vendor.

If the agent finds a purchaser for premises for which he/she has been instructed to find a tenant, the agent is not entitled to commission. A buyer responding to an agent’s sign at the front of the house is sufficient for the agent to be the effective cause of sale.

See duty of agent