Can a commission agent be held responsible for the failure of a purchaser to pay their commission?

Saskatchewan, Canada


The following excerpt is from Powell v. Montgomery, 1915 CanLII 188 (SK CA):

The defendants here substantially carried out what they bargained to do. They effected sales which were approved of by the plaintiffs, and in doing so, they thereby earned the commission. This seems clear from the agreement, in that it refers to the commission as owing, and again as due, the defendants on each sale made. It is true that the defendants were to collect the various instalments from the purchasers without further charge, but it can scarcely be urged that the commission was not earned until these collections were made in view of the fact that under the terms of the agreement there is the provision that the defendants are “not to charge commission on such collections,” and moreover, there would be outstanding instalments still to be collected after sufficient had been received to pay the commission. Nor can the contention of counsel for the plaintiff be given effect to, that payment of the commission by the plaintiffs is dependent upon the purchasers making payment of their instalments. The agreement provides that the defendants shall be entitled to retain the commission owing and due them on each sale out of the instalments collected from the purchaser, but that does not necessarily mean that the payment of their commission is to be dependent upon payments by the purchaser. The agreement provides that each contract of sale must be approved of and signed by the plaintiffs. That provision was not for the purpose of protecting the plaintiffs in the terms of sale, as the prices and terms are fully set out in schedule (A) and the form of contract is, under the agreement, to be supplied by the plaintiffs themselves. Their approval must, it seems to me, have special reference to the character of the proposed purchaser and the value of his covenant to pay. In my opinion the agreement as a whole contemplates that the plaintiffs shall take full responsibility for the failure of the accepted purchaser to pay, and that the defendants are entitled to their commission irrespective of whether such purchaser carries out the terms of his contract or not. It is quite clear that it was no fault of the defendants that their services proved somewhat abortive, and it does not appear to me to be material to the case as to whether the fault is to be laid to the plaintiffs or to the purchaser. Counsel for the plaintiffs relied on the authority of Beale v. Bond, 17 T.L.R. 280. A perusal of that case shows it to be clearly distinguishable. There the terms under which the commission agent acted were as follows:— I agree to accept a sum of £1,150 for the above property, and you are to be at liberty to receive anything over and above that as a commission, it being understood that I am to receive the full sum of £1,150 without deduction, except, of course, apportionments of outgoings.

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