An agent has an exclusive agency agreement that expires on Friday. On Saturday, the owner sells the property privately to a buyer who first inspected during the agency period. What is the agent's entitlement to commission?

Q: What is the correct answer to: An agent has an exclusive agency agreement that expires on Friday. On Saturday, the owner sells the property privately to a buyer who first inspected during the agency period. What is the agent's entitlement to commission?

The correct answer is Commission only if the agency agreement contains a protection clause. Option D is correct because commission entitlement after agency expiry depends entirely on the specific terms of the agreement. A protection or tail clause explicitly extends the agent's commission rights for a specified period after expiry, covering sales to buyers introduced during the agency period. Without such a clause, the agent has no legal claim to commission once the agreement expires, regardless of their role in introducing the buyer. This reflects standard contract law principles where rights must be clearly defined in the agreement.

Q: What background knowledge is needed for this Agency Practice question?

Protection clauses (tail clauses) are contractual provisions in agency agreements that extend an agent's commission rights for a specified period after the agreement expires. These clauses typically cover sales to buyers who were introduced to the property during the agency period. Under Australian Consumer Law and state-based real estate legislation, agency agreements must clearly specify commission entitlements and conditions. Without a protection clause, an agent's rights generally terminate with the agreement, following standard contract law principles. The clause protects agents' legitimate interests while providing certainty for property owners about potential ongoing commission obligations.

Q: What is a good way to remember the answer to this Agency Practice question?

Think of a dog's TAIL - it follows behind the dog even after the dog has moved on. A protection clause is like a TAIL that follows the agency agreement: T-ermination doesn't end it, A-gent gets protection, I-ntroduced buyers still count, L-egal clause required. When you see questions about commission after agency expiry, remember the TAIL - check if there's a protection clause that extends the agent's rights like a tail extends behind the main body of the agreement.

Q: What exam tip applies to this Agency Practice question?

Look for key words like 'protection clause', 'tail clause', or 'specific provisions' in agency questions. Commission after expiry always depends on what's written in the agreement, not general principles.

Q: How does this Agency Practice concept apply in Australian real estate practice?

Agent Sarah has an exclusive agency that expires Friday. During the agency, she showed the property to the Johnson family multiple times and they expressed strong interest. On Saturday, the Johnsons contact the owner directly and purchase the property. If Sarah's agency agreement included a 30-day protection clause, she would be entitled to full commission. Without this clause, despite her efforts in introducing and nurturing the buyers, she receives nothing. This scenario emphasizes why agents must ensure their agreements include appropriate protection clauses.

Question

Agency PracticeAgency AgreementsMEDIUM

An agent has an exclusive agency agreement that expires on Friday. On Saturday, the owner sells the property privately to a buyer who first inspected during the agency period. What is the agent's entitlement to commission?

Answer Options

A

No commission as the agency agreement has expired

B

Full commission as they introduced the buyer during the agency period

C

Half commission due to the expired agreement

D

Commission only if the agency agreement contains a protection clause