Summergreene v Parker

The case of *Summergreene v Parker* involved an appeal to the High Court of Australia concerning a real estate agent's claim for commission. The plaintiff, Mr. Parker, sought to recover £500 from the defendant, Mrs. Summergreene, alleging he had effected the sale of her business. The dispute centred on whether the correspondence exchanged between the parties constituted a binding contract for the sale of the business, thereby entitling the agent to his commission.

The legal issues before the court were whether the documents exchanged between the vendor and the prospective purchasers created a concluded contract for the sale of the business, and if so, whether the agent had successfully "effected a sale" as required to earn his commission. Specifically, the court had to determine if the offer to purchase, made by trustees on behalf of a company to be formed, and the vendor's acceptance, created a legally binding agreement, particularly in light of a clause stipulating that a "usual agreement for sale and purchase" was to be entered into.

The High Court, overturning the decision of the Supreme Court of New South Wales, held that the documents did not constitute a concluded contract for the sale of the business. The Court reasoned that clause 6 of the offer, which stipulated that a "usual agreement for sale and purchase" was to be entered into containing terms satisfactory to both parties and the proposed company, introduced such uncertainty as to prevent the arrangement from amounting to a binding contract. The Court found that essential terms were left to be determined by future agreement, and without evidence of what constituted "usual terms," the agreement remained incomplete. Furthermore, the Court considered the principle established in *Kelner v Baxter*, which allows for the personal liability of agents contracting on behalf of non-existent principals, but found it inapplicable here due to the fundamental uncertainty in the terms and the impossibility of substituting the agents for the proposed company in relation to all stipulated conditions, such as shareholding.

Consequently, the High Court concluded that no sale had been effected, either to the proposed company or to the individuals acting as trustees. Therefore, the plaintiff had not earned his commission. The appeal was allowed, and the judgment entered for the plaintiff by the Full Court of the Supreme Court was set aside.