Sorrell v Finch: HL 1976

A purchaser had paid a deposit to the estate agent, but sought its return before contracts had been exchanged.
Held: In the absence of any express extension of authority to a estate agent or auctioneer to receive a pre-contract deposit, the potential purchaser is, at all times until the contract is entered into, the only person with any claim or right to the deposit. If the agent chooses to forward such deposit, then he must bear the loss. The vendor at that stage has no liability to repay the deposit. After completion, the agent holds any deposit for the vendor subject only to his right to deduct his commission and expenses. In a dispute between the vendor and purchaser, the agent should interplead.

Citations:

[1976] 2 All ER 371, [1977] AC 728, [1976] 2 WLR 833, 120 Sol Jo 353

Jurisdiction:

England and Wales

Agency

Updated: 06 May 2022; Ref: scu.219191