OGH: No Commission despite Successful Brokerage?

Jun 21, 2024 Benn-Ibler Rechtsanwälte

In order for a broker to be entitled to a commission, the transaction to be brokered must have come about as a result of the broker’s contractual activity, or at least a transaction of the same value as the one to be brokered under the contract must have come about as a result of the broker’s activity.

In the case at hand, the defendant had come across the plaintiff’s estate agent on the internet while looking for an apartment for residential purposes. The plaintiff found the defendant an apartment, but informed the plaintiff that the property was classified as office space. A reference to this classification was also included in the purchase offer signed by the defendant and the seller. However, the contract was not concluded, and the seller sold the apartment to a third party.

The plaintiff claimed payment of a broker’s commission of EUR 140,400, stating that the contract was concluded due to their contractual services.

The court of first instance awarded the plaintiff EUR 70,200 on the basis that, as a result of the plaintiff’s activities, a valid contract of sale had been concluded between the sellers and the defendant. However, the court reduced the estate agent’s commission by half as the plaintiff had breached their duty of disclosure. The court of appeal, however, upheld the claim in its entirety.

The case was then referred to the Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH), which delivered the following judgment:

The right to a commission presupposes the conclusion of a brokerage agreement between the parties to the contract. This agreement may also be implied by the fact that the interested party recognises that they are using the broker’s commissionable activity and the broker does not object. The OGH assumed that there had been a natural agreement on the subject matter, which was a residential property.

The plaintiff had last offered the defendant a property designated as office space and had also pointed out this classification. There can be no presumption that there had been a subsequent implicit modification of the brokerage agreement.

The plaintiff had not acted in accordance with the terms of the contract. Furthermore, there was no ‘equivalence of purpose’, as the property could have only be used as a dwelling after redesignation by the local zoning authorities. Therefore, the plaintiff was not entitled to a commission.

OGH 4 Ob 182/23b (26 April 2024)