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Mandate limits: intermediate operation or specific operation
In real estate transactions, the scope of the mandate entrusted to a real estate agent plays a crucial role. According to Article 72, paragraph 3, of Decree No. 72-678 of July 20, 1972, if a mandate includes the authorization to engage in a specific operation, this must be expressly mentioned. In the absence of such a stipulation, the mandate is considered as a simple intermediary contract, in which the role of the agent is limited to presenting the potential buyers to the seller.
Protection of the seller: Refusal to carry out the transaction
In one reported case, a non-exclusivewas firmedsales mandate was concluded between an agency and an apartment owner, with a sale price of €170,000 net for the seller, and the buyer bearing the commission. When the seller refused to sign a “compromis de vente” with a buyer who accepted these financial conditions and terminated the mandate, the agency demanded payment of €10,000 in damages.
The agency was initially successful on appeal, but the decision was overruled by senior judges. They conclude that the seller’s refusal, without justification, to sign the “compromis de vente” with the buyer presented by the real estate agent does not constitute a fault entitling the agency to claim damages.
In addition, the civil chamber of the Court of Cassation, in a judgment dated May 3, 2018, emphasized the protection of the rights of the seller. They judged that an exclusive mandate cannot engage the responsibility of the seller if he refuses to carry out the real estate transaction under the conditions agreed in the mandate. As the mandate did not contain an express clause authorizing the agent to sign the compromise on behalf of the sellers, the agency could not claim damages.
This case law specifies that, unless otherwise stipulated, the mandate must not hinder the protection and control of the seller over the transactional process in his relations with the real estate agent. Courts emphasize the importance of clear contract terms and agreements to protect sellers’ interests and prevent undue liability.
