A recent decision from the Supreme Court of Queensland, Evans v Jan, provides a critical lesson for agents and property professionals. The case highlights that agents must not alter essential contract terms such as agreeing to late payment of a deposit without express, written instructions from the seller. At Ensure Legal, we regularly advise clients on the importance of clearly defining the scope of an agent’s authority to avoid costly disputes.
The Core Issue: Was the Agent Authorised to Accept Late Payment?
In this case, the agent informed the buyer that late payment of the deposit was acceptable without obtaining the seller’s consent. The buyer, believing the agent had authority, paid the deposit two days late. However, the seller, who had not authorised any extension, terminated the contract and retained the deposit. The court upheld the seller’s decision, reinforcing the principle that agents cannot unilaterally vary essential terms without the principal’s express approval.
Actual vs Ostensible Authority: Key Distinction
The court drew a clear distinction between actual and ostensible authority. Actual authority is derived from the seller’s explicit or implied instructions. Ostensible authority arises when the seller’s conduct reasonably leads the buyer to believe the agent has authority. In this case, the agent’s actions did not reflect the seller’s consent, and the buyer’s reliance on the agent’s assurances was misplaced.
Why Written Instructions Are Essential
At Ensure Legal, we emphasise that agents should always obtain written instructions from the seller before making any representations that could alter essential terms of a contract. Failing to do so exposes both buyers and sellers to significant risks, including contract disputes and potential financial losses.
Practical Advice for Buyers, Sellers, and Agents
For sellers, define the scope of the agent’s authority in writing to prevent misunderstandings. For buyers, confirm any variations to contract terms directly with the seller or their solicitor. For agents, never vary essential contract terms without explicit, written approval from the seller.
Final Thoughts
The Evans v Jan decision serves as a timely reminder that agents must operate strictly within the scope of their authority. At Ensure Legal, we assist clients in navigating these complexities, ensuring that their property transactions are legally sound and protected against unforeseen disputes. For professional guidance on property contracts and agency authority, contact Ensure Legal today.
