Nov 01, 2007

In a Limited Dual Agency, When is Notice Received? #413

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By Mike Mangan,
B.A., LL.B.

In general, when a licensee serves as agent for her principal—the client—the licensee has authority to send and receive communications for that client, unless the client directs otherwise.

What about a limited dual agent? If a licensee is a limited dual agent, can the licensee receive notices from other persons for the seller and buyer, respectively, or must each client receive those notices personally?

In a recent case involving the sale of the sellers’ ranch, the licensee was a limited dual agent and the parties apparently used BCREA’s standard form Contract of Purchase and Sale.1 In the standard contract, a party must remove a subject clause by giving written notice to the other side on or before the subject removal date, or the contract terminates. In the ranch sale, the subject removal date was December 15.

On December 15 at 9:31 pm, the buyers delivered an email to the licensee advising that the buyers’ condition precedents were removed. At that point, the licensee faxed the usual subject removal form to the buyers, asking them to complete it and return it to the licensee by fax.

The licensee testified to the effect that he promptly left a telephone message for the sellers that evening confirming that the buyers were removing their subject clauses. The seller husband denied the licensee’s version of events, claiming instead that he didn’t personally learn the buyers were removing their subjects until four days after the deadline for subject removal. The sellers refused to complete.

When the buyers sued the sellers for specific performance, the sellers defended on several grounds, including a claim to the effect that there was no contract because the buyers didn’t remove their subjects on time.

Even if it were true that the sellers didn’t personally learn the subjects were removed until four days after the deadline, the subjects were removed on time. By notifying the licensee by email of the removal of their subjects in the evening of December 15, the buyers delivered written notice on time. Delivery to the sellers’ agent, the licensee, constituted delivery, in law, to the sellers.2

The court said, in part,

The (sellers) entered into a Limited Dual Agency Agreement with (the brokerage) in addition to the initial multiple listing agreement. It specified that the brokerage and its licensees were the agents for both the buyer and seller. All communications regarding the purchase of the ranch between the parties were conducted through (the licensee). (The licensee) did not have the authority to sign any documents on behalf of the (sellers), or enter into any contracts on their behalf . . . However, (the licensee) was in fact their agent for dealing with the (buyers), and for receiving communications on their behalf.3

The court found that the sellers were notified in writing about the subject removals in time, held that there was an enforceable contract and ordered the sellers to specifically perform it.

The standard form Limited Dual Agency Agreement doesn’t expressly say anything about the agent’s authority to give and receive communications for all parties; therefore, a licensee may better avoid any misunderstanding about his or her authority to deal with communications by specifically telling each party that the agreement implicitly allows the licensee to give and receive communications for all parties.

 1.Young et al v. Fleischeuer et al, 2006 BCSC 1318; supplementary judgment on costs, 2006 BCSC 1806.
 2.See also B. Zar Enterprises Corp. v. Hitchen (1982), 23 R.P.R. 17; 34 B.C.L.R. 87 (S.C.).
 3.Young  v. Fleischeuer 2006 BCSC 1318 at para. 67.

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Author profile photo
By Mike Mangan,
B.A., LL.B.

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