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Joshua
Joshua, Lawyer
Category: Law
Satisfied Customers: 25358
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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on the 14th May I signed a contract in my home with a company

Resolved Question:

on the 14th May I signed a contract in my home with a company to sell my house, stables and land.
I gave them 3 post dated cheques to cover advertising and brochures and registration.
In hindsight I can not see why the need the up front payment, so I cancelled the cheques and informed the company, on 22nd May.
They want the registration payment in full and 50% of the fees if I cancel the contract.
is there a cooling off period allowed on this type of contract?
Submitted: 2 years ago.
Category: Law
Expert:  Joshua replied 2 years ago.

Joshua :

Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.

Joshua :

May I clarify that this company is a form of estate agent please?

Joshua :

Did you sign the contract at their office or in your home?

Customer:

yes a business sales company.

Customer:

I signed at my home

Joshua :

Thanks. Were you contracting as a business or as a consumer?

Customer:

We ran Our home upto 3 years ago as business.

Customer:

Due to illness we have not carried out business for 3 years.

Customer:

So are we consumers?

Joshua :

Thanks. So this is a residential home now and is being sold as such?

Customer:

We agreed it is still set up as a B+B so would be best marketed as such

Joshua :

Thank you. Did the company give you a notice advising you of your right to cancel the agreement?

Customer:

No

Joshua :

Thanks. Because you have asked the company to market the property as a business I do not consider that the Cancellation of Contracts made in a Consumer’s Home or Place of Work etc. Regulations 2008 will apply because in order to apply you need to be a consumer and in the regulations “consumer” means a natural person who in making a contract to which these Regulations apply is acting for purposes which can be regarded as outside his trade or profession.

Joshua :

If these regulations do apply then you would have a right to cancel the agreement but as above I do not think they will apply here as they might if you had asked them to market the property not as a business.

Joshua :

However even if they do not apply, this does not mean you have no rights.

Joshua :

You mention they are asking for a registration fee and 50% of the fees you agreed. Could you clarify what the "registration fee" is and precisely what they are asking for 50% of exactly?

Customer:

The registration fee was to cover advertising and brochures. the agreed fee for sale was £30K less registration fee

Joshua :

Thanks. Have they actually prepared any advertising material yet?

Customer:

50% of the sales fee

Joshua :

How long was the agreement to run for in terms of a minimum term?

Customer:

They say so but have not seen

Customer:

2years or till sold

Joshua :

Thanks. Is there any obligation on your part to accept an offer for the property - e.g. a minimum amount you have agreed to accept?

Customer:

yes

Joshua :

Thanks. This presents a difficulty. Had you not agreed to accept offers in excess of a certain amount there would have been relatively little difficulty in cancelling the agreement as you would not have been bound to accept any offers in any event so they could not claim to have lost out on any profit. However if you have agreed that you would accept offers over a certain amount they can claim loss of profit if they can show that it is likely that they would be able to find a buyer within the time period you have given them, particularly if you have given them sole agency rights for the two year period. .

Joshua :

If the agreement had been a consumer contract the matter would be a relatively simple matter to cancel but business agreements offer far lesser protection and based on what you say this would appear to be a business agreement.

Customer:

so I need to reinstate the contract or lose the money?

Joshua :

Accordingly if you decide to cancel the agreement they could seek to claim their costs in any preparation of brochures they have prepared but only if they have in fact order or prepared them and also they could seek loss of profit. It does not follow that they could claim 50% of the commission fee as they would need to show that they could reasonably have brought a buyer forward which may be difficult for them to sustain, however if you were to dispute a settlement figure they could seek a county court claim against you and if they could sustain the above, they may be able to obtain a reasonably proportion of their fee. Equally they may be very limited in what they can claim depending upon the quality of evidence they can bring showing that they have a potential buyer.

Joshua :

However it is unlikely you would want that uncertainty as a risk hanging over you. If you do still in principle want to sell, and it is principally the upfront costs that you are in retrospect unhappy with, the lesser of two evils may be to confirm you will proceed with the agreement and then should they not have achieved a sale within the minimum period provided, give them written notice of cancellation.

Joshua :

I am sorry that is probably not very positive overall though on balance i think potential exposure to a claim for loss profit is likely to be something of a potentially distressful distraction for you and could potentially be costly.

Joshua :

In terms of cooling off, contracts signed at home for most types of consumer contract have a 7 day cancellation period and mail order goods have a 7 working day cancellation period though in each case the periods are extended if you do not receive notice of your cancellation rights. Business agreement except certain finance credit products however contain no cooling off periods.

Joshua :

Is there anything above I can clarify for you?

Customer:

No and thank you

Joshua :

A pleasure. I hope the sale works out positively in the end.

Joshua :

If you have no further questions for now I should be very grateful if you would kindly take a moment to rate my service to you today. Your feedback is important to me. If there is anything else I can help with though please reply back to me though.

Joshua, Lawyer
Category: Law
Satisfied Customers: 25358
Experience: LL.B (Hons), Higher Prof. Dip. Law & Practice
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