In South Australia, an exclusive agency agreement expires, but the agent claims commission on a sale to a buyer they introduced during the agency period. The sale occurs 10 days after expiry to this buyer. What is the likely outcome?

Q: What is the correct answer to: In South Australia, an exclusive agency agreement expires, but the agent claims commission on a sale to a buyer they introduced during the agency period. The sale occurs 10 days after expiry to this buyer. What is the likely outcome?

The correct answer is The agent is entitled to full commission under the protection period clause. Option B is correct because standard exclusive agency agreements in South Australia include protection period clauses that extend the agent's commission entitlement beyond the formal expiry date. When an agent introduces a buyer during the active agency period, they retain commission rights if that buyer purchases within the protection period (typically 30-90 days). Since the sale occurred only 10 days after expiry to a buyer introduced during the agency term, the protection clause applies, entitling the original agent to full commission despite the agreement's expiry.

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

Protection period clauses are standard provisions in exclusive agency agreements across Australia, typically ranging from 30-90 days after agreement expiry. These clauses protect agents' commission entitlement when sales occur to buyers they introduced during the active agency period. The Real Estate Institute of South Australia (REISA) standard forms include such provisions. Protection periods must be clearly disclosed and agreed upon in writing. They serve to protect agents' marketing investments and buyer cultivation efforts while providing certainty about commission liability. The clauses are enforceable under contract law and are considered reasonable restraints of trade when properly drafted and disclosed.

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

P-rotection period extends beyond expiry, R-ights remain for introduced buyers, O-riginal agent keeps commission, T-ime limit applies (usually 30-90 days), E-xclusive claim to that buyer, C-ontract clause must exist, T-racing buyer introduction is key. Think of it like a 'commission umbrella' that protects the agent even after the rain (agency period) stops. When you see questions about expired agency agreements and commission claims, immediately think PROTECT. Check if: there's a protection period clause, the buyer was introduced during the original agency, and the sale occurs within the protection timeframe. If all three elements exist, the original agent retains commission rights.

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

Look for three key elements in protection period questions: 1) Was there an exclusive agency with protection clause? 2) Was the buyer introduced during the original agency period? 3) Did the sale occur within the protection timeframe? If yes to all three, the original agent keeps commission rights.

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

Agent Sarah has an exclusive agency on a property with a 60-day protection period. During the agency, she shows the property to buyer John and maintains contact. The agency expires, and the vendor appoints a new agent. Three weeks later, John contacts the vendor directly and purchases the property. Despite the expired agreement and new agent appointment, Sarah is entitled to full commission because she introduced John during her agency period and the sale occurred within her 60-day protection period. The new agent receives no commission on this sale.

Question

Agency PracticeAgency AgreementsSAHARD

In South Australia, an exclusive agency agreement expires, but the agent claims commission on a sale to a buyer they introduced during the agency period. The sale occurs 10 days after expiry to this buyer. What is the likely outcome?

Answer Options

A

The agent has no claim as the agreement has expired

B

The agent is entitled to full commission under the protection period clause

C

The commission must be split between the original and new agent

D

The vendor must pay commission to both agents