Agent for Sale of Property by Private Treaty – Sole Selling Rights
Agreement between the owner and the agent who is appointed to find a purchaser for a certain property to be sold, detailing the agents duties and the owners obligation to accept the purchase, amongst other terms.
A private treaty (also known as a private sale) occurs when a property is
listed for sale with an asking price. Interested buyers make an offer to
the agent, who in-turn presents the offer to the seller.
The agent will negotiate individually with prospective buyers to achieve a
sale as close to the price as possible.
Unlike auctions or fixed date sales, private treaty sales usually do not
have a set date by which the property is to be sold.
Sole Selling Rights
This is an arrangement where a single agent is appointed to market a
property for sale. The agent will be entitled to a fee if there is any
disposal of the property while the agent’s agreement is in force,
regardless of who found the buyer or had negotiations with them.
Benefits of Appointing an Agent
A real estate agent may potentially help to facilitate a sale or purchase in
several ways, such as:
• giving the seller an idea of current market conditions
• advising the seller on when to sell their property, and at what
price
• facilitating any marketing/advertising of the property, such as
‘dressing’ the property for sale
• letting the seller know when an offer has been made and then
letting the prospective buyer know if the offer has been accepted.
Private Treaty
Sale by private treaty is the method employed by most estate agents.
Initially a marketing plan is prepared for the property which includes a
guide price and a discussion around marketing material (photography,
brochures and other marketing angles).
A guide price is an indicator of what a seller is willing to sell the property
for and is used to attract buyers and offers. If there is a lack of interest in
a property an agent will likely advise to reduce the guide price in an
effort to generate more interest.
Different types of properties require different methods to choose the
correct guide price, for example, a high-end luxury property that only a
handful of people may be interested in would typically be priced slightly
above the valuation level as only one serious buyer may be interested in
it. The higher guide price will give the agent more leverage while
negotiating with fewer interested parties.
A lower than expected guide price can help to stimulate interest and
encourage active bidding to often exceed expectations. Properties which
are priced too high can remain on the market too long and become
stagnant.
The estate agent will create the property listing on their website and
property portals and also circulate to any potential buyers who have
registered with them. The potential buyers may view the property and
submit an offer. Once an offer is received the agent will update other
interested parties to see if they would like to place an offer.
After the marketing period the agent will advise the property seller on
bids received and generally aim to select the top bidder or the one that is
most likely to close the sale. The agent may also advise to complete the
bidding process by way of ‘best & final bids’ thus ensuring the seller
receives the optimum price and can make an informed decision as to the
best candidate. Best and final bids would request all interested parties to
submit their best and final offer by a certain date and time to include any
specific conditions and evidence of funding.
Once the seller accepts an offer the agent will request a booking deposit
from the buyer (this is fully refundable until contracts are signed), and
issue a sales advice note to the buyer, seller and both of their solicitors
outlining the terms of the sale. The solicitors then commence the
conveyancing process of the sale. It is the agent’s responsibility to
ensure the buyer completes a survey and bank valuation (if required) as
soon as possible. The property can then move to a status of ‘sale
agreed’.
Advantages of Selling a Property Through Private Treaty:
Opportunity for a quick sale
As soon as a private sale property goes on the market agents can start
to receive offers. Auction campaigns normally run for four to six weeks,
but a popular property being sold via private treaty/private sale, can sell
within a few days after hitting the market.
Greater flexibility
Allows more flexibility in determining the final price and negotiating with
each buyer. Agents with less time pressure may lean towards a private
sale.
Time to negotiate
As the agent you have more time to make a decision and negotiate the
price and terms and conditions of the sale. As there is less emotion
decisions can be made more thoughtfully.
More price certainty
Private treaty sale gives the agent greater control over the final price.
Unlike an auction which hands control to the market for the sale, a
private treaty/private sale campaign gives the agent more time to
consider whether they will accept, decline or negotiate an offer.
Buyers often prefer this method as they know how much the seller wants
Privacy
Offers the opportunity for private negotiation of the price between the
buyer and the agent, and enables the agent to withhold sensitive
information, such as the sale price, from the public.
Setting an asking price
The best way to set the asking price is in consultation with your real
estate agent.
Your agent would have presented you with a market appraisal figure
earlier in the campaign which is a good starting point. However, over the
duration of the sales campaign, markets can shift, and prices can
change.
Additionally, your agent has been hosting open homes and talking to
potential buyers about the property and gauging interest. They are best
equipped to help steer you on a suitable market led asking price.
Receiving offers and negotiating a sale price
Offers to buy your property will be presented in writing to your real estate
agent. Your agent will then discuss each offer with you to determine if
you want to decline, accept or negotiate.
The agent is a skilled negotiator and will continue to negotiate a price as
close to the sellers asking price as possible.
Finalising the sale
If an offer has been accepted, the final step is to legalise the sale.
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Agreement to compromise a building dispute relating to a threatened interference with proprietary rights, including a right of way
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Amplification of ancillary rights and surface use
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Application to have a certificate issued depicting the rights to minerals on certain land.
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Application for certificate of real rights in land.
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Application by registered owner to note the cancellation of the contract due to a certain reason.
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Form D7- setting out the section of the act that requires the recording to take place and providing supporting documents.
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Appointment of Merchant in the Republic of South Africa with Sole Concession of Rights of Sale in Territory Outside the Republic
This is a legal agreement subject to the terms and conditions as
provided by www.LawyersEzyFind.co.za.
In terms of the agreement the manufacturer (provider) may arrange for
and make available financing services to satisfy the payment obligations
arising from the purchase of goods to the merchant’s customer’s.
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Financing services are to be promoted, marketed, and used by
merchant solely for the purpose of permitting customers to satisfy their
payment obligations to the merchant in connection with the purchase of
goods and services from the merchant.
Cooperation
The merchant is required to make available to the provider such
additional information relating to any customer or order as is reasonably
requested by the provider in order for the provider to determine whether
a customer is eligible to receive the financing services from the provider.
The merchant shall reasonably cooperate with the provider in all matters
relating to the financing services.
Assumptions on Provider’s Performance
The provider shall not be deemed to be in breach of its obligations under
this agreement if the provider’s performance of its obligations hereunder
are prevented or delayed by any act or omission of the merchant, or its
customers, or their officers, directors, employees, contractors, agents or
other representatives.
Payments by Customers
The merchant is responsible for providing notice to the provider of any
customer that seeks to pay amounts due for goods or services to be
purchased from the merchant.
The provider shall pay the merchant the amount requested by such
customer for the order (mutually agreed in writing), provided that such
amount shall not be in excess of the amount such customer is eligible to
receive.
Covenants, Representations and Warranties.
Each party should agree to:
• comply with all applicable laws in connection with the
performance of such party’s obligations in terms of the
agreement;
• maintain complete and accurate records relating to the
performance of such party’s obligations under this agreement;
and
• obtain and be responsible for all licenses, permits and other
approvals necessary from any applicable regulatory or legal
authority necessary for such party to perform its obligations.
Mutual Representations and Warranties
Each party represents and warrants that:
• it is duly organized, validly existing and in good standing under
the laws and regulations of its jurisdiction of incorporation or
organization, as applicable;
• the execution and delivery by such party of this agreement and
the performance of its obligations hereunder have been duly
authorized by all necessary corporate action on the part of such
party;
• this agreement has been duly executed and delivered by such
party and constitutes a legal, valid and binding obligation of
such party;
• it is and will be in compliance with all applicable laws, including
without limitation, all applicable data security and privacy laws;
• it has and will maintain all licenses, consents, authorizations,
permits, approvals and certificates required by applicable law to
perform such party’s obligations hereunder; and
• the execution and delivery of this agreement by such party does
not violate, conflict with, require consent under or result in any
breach of the provisions of any agreement to which it is a party
or by which it is bound.
Merchant Representations and Warranties
The merchant represents, warrants and agrees that each order
submitted to the provider represents a bona fide sale and delivery of
goods or rendition of services to a customer in the ordinary course of its
business and that the information contained therein is true, correct and
complete.
No Other Rights. Except as expressly provided in the Agreement
The merchant shall not take any action that may interfere with any of the
provider’s rights in goods or services including the provider’s ownership
or exercise thereof.
The merchant is prohibited from challenging any right, title or interest of
the provider in the goods or services, or from making any claim or taking
any action adverse to the provider’s ownership of the goods or services.
Delivery
The merchant will be required to deliver the merchandise listed in the
agreement to the customer listed on orders on the dates and in the
quantities specified in each order.
In the event of any delays to the scheduled delivery date, and without
limiting the provider’s other rights and remedies hereunder, the
merchant will notify the provider and customer of such delay and work
diligently to remedy such delay immediately.
Title and Risk of Loss
The title in the goods and merchandise identified in the orders, shall not
pass to the customer listed on the order until the merchandise has been
delivered to such customer. All risk of loss or damage with respect the
merchandise in orders shall remain with merchant and pass to the
customer only upon delivery.
Term and Termination
This agreement continues until terminated by either party, unless
otherwise agreed to by the parties in writing. Either party, in its sole
discretion, may terminate this agreement by providing at least ten (10)
days’ prior written notice of termination to the other party.
Effect of termination: the expiration or termination of this agreement shall
not relieve the parties of any right or obligation accruing prior to such
expiration or termination. Upon expiration or termination of this
agreement, each party agrees to return all confidential information
received from the other party, except as to such information it may be
required to retain pursuant to law or to service the accounts of
customers that received goods or services and except for one copy of
such information that may be retained by such party’s legal department.
Arbitration
Any claim will be resolved, at the election of the provider or merchant,
by binding arbitration If for any reason a selected organization cannot,
will not, or ceases to serve as an arbitration administrator, the provider
or merchant may substitute another arbitrator or arbitration organization
that uses a similar code of procedure and is mutually acceptable to both
parties.
For purposes of this arbitration provision, “claim” means any claim,
dispute or controversy whether past, present or future, and includes,
claims arising from or relating to:
• this agreement;
• any transactions effected pursuant to this agreement;
• terms of or change or addition of terms to this agreement;
• collection of merchant’s obligations arising from this agreement;
• advertisements, promotions or oral or written statements
relating to this agreement or any transactions between
the merchant and provider pursuant to the agreement, including
any claims regarding information obtained by the provider from,
or reported by the provider to, credit reporting agencies or
others;
• claims between a merchant and provider or their parent
corporations, wholly or majority owned subsidiaries, affiliates,
predecessors, successors, assigns, agents, independent
contractors, employees, officers, directors or representatives
arising from any transaction between the merchant and
provider pursuant to this agreement; and
• claims regarding the validity, enforceability or scope of this
arbitration provision or this agreement including but not limited
to whether a given claim or dispute is subject to arbitration.
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Appointment of Overseas Distributor with Exclusive Rights
The model contract accessed on www.LawyersEzyFind.co.za provides
for the appointment of an overseas distributor with sole or exclusive
rights, which will be explained further.
The purpose of an international distribution contract is to establish one
or more sales points within a geographical area in a foreign country from
which goods and services can be offered to a specific clientele.
This type of contract enables suppliers or manufacturers of different
products to benefit from existing commercial facilities and to select their
trading partners. This commercial contract model also has the
advantage of enabling suppliers to impose sales methods and practices
associated with their products or brands.
The international distribution contract is a framework agreement, which
means that it establishes general obligations for each of the parties over
a lengthy period and is supplemented by general conditions of sales,
which are often annexed to the contract in order to specify the products
and/or services in question, prices, delivery arrangements, and so on.
There are different models of international distribution contracts made by
different companies and organizations whose purpose is to ease the
negotiation and agreement between suppliers and distributors.
An international distribution agreement is essentially a contract that
creates a framework for a business relationship between global parties.
To ensure effective and efficient transactions, an international
distribution agreement should be comprehensive.
Among other things, some of the main clauses that you typically will find
in an international distribution contract include products and territory,
obligations of the parties, exclusivity provisions, renewal/termination,
and dispute resolution.
Products and Territory
As a starting point, international distribution agreements will generally
provide details regarding the specific products and the specific territory
that will be covered by the contract.
Obligations of the Parties
Similar to other commercial agreements, it is imperative that an
international distribution contract clearly outlines the responsibilities of
each party. Both the supplier and the distributor must have clarity
regarding their duties to perform under the terms of the deal.
Exclusivity Provisions
Some international distribution agreements include exclusivity
provisions. While not all of these agreements are exclusive, this is an
issue that should be addressed within the contract negotiations.
Renewal/Termination
The agreement should also define the length of the commercial
relationship. In addition, procedures should be created to deal with
issues related to renewal and termination.
Dispute Resolution
Finally, distributor agreements should include dispute resolution
provisions. No matter how good the relationship between the supplier
and the distributor, there is always a risk of dispute.
With international business contracts, it is often advisable to include an
arbitration provision. Arbitration offers many advantages compared to
handling disputes under local laws.
It is important to note that this list is just a brief sampling of the important
contract terms that you will find in an international distributor agreement.
These agreements should always be customized to meet the unique
needs of each party.
Exclusive Distribution
In terms of this type of distribution the distributor is given the exclusive
right to sell the products in a stated territory. This means that the
supplier or manufacturer may not sell the products itself.
The main advantages of sole / exclusive distribution from the supplier’s
perspective is that the distributor may have a higher incentive to allocate
resources toward development of sales and marketing.
There are also a few disadvantages from the supplier’s/manufacturer’s
perspective which should be taken into consideration:
• eliminating intra-brand competition through an exclusivity may give
distributor too much comfort to intensify sales;
• can lead to loss of control and flexibility;
• may lead to problems in MA transactions of supplier’s business.
Consequences of exclusivity from the supplier’s/manufacturer’s
perspective
• if sole/exclusive contracts are entered into, additional contractual
measures must be taken, such as:
- non-compete obligation of distributor;
- no long term contracts;
- clear definition: what is exclusive (territory, products, sale
channels).
Exclusivity: Antitrust considerations
The supplier/manufacturer may have an interest to keep territorial
markets separate and therefore to prevent sales into other territories
(for example, because of price differences).
It is important to check the antitrust compliance of respective clauses.
The supplier/manufacturer may only prevent the distributor from actively
promoting sales into territories reserved exclusively for himself or other
distributors. This further entails that:
- passive sales must remain allowed;
- the distributor cannot be prevented from selling in territories which
have not been granted to others on an exclusive basis.
Price fixing
The distributor must remain free to fix the minimal resale price of
a product.
Parallel trade
There is a prohibition against a distributor passively selling to customers
outside the territory if distributor knows that the customer intends to
resell the products back into the territory.
Non-compete obligation of distributor
A non-competition clause shall not last for more than 5 years and not
exceed one year after termination.
As the clause is essential for the contract, the term of contract shall be
limited to 5 years (there will be no automatic renewal).
Sell-off Period; Repurchase of Inventory
In the agreement, it is important to decide what should happen with the
products which the distributor has in stock at the time of the cessation of
the collaboration.
A frequently used model is for the distributor to be allowed to sell the
products after the termination of the agreement, but on the terms and
conditions set out in the agreement.
Governing law
What rules are relevant in relation to the agreement may vary from
country to country. If you enter into an agreement with a foreign partner,
it is therefore a good idea to ensure that it is valid under and complies
with the governing law agreed upon, and that the agreement is
enforceable against your partner, if necessary.
it is important to remember that, depending on the circumstances, a
delivery agreement may violate national or EU competition law if it
contains provisions restricting competition.
Arbitration may be used as an alternative to national courts of law, and if
the parties want to use arbitration proceedings, Clause 15 must be
amended accordingly.
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Assignment of Rights and Obligations by a Principal Under an Agency Agreement
Memorandum of assignment agreement between two companies which is a supplementary to an agreement concluded between the companies earlier whereby the company assigns rights and duties to the asignee company.
The agent owes the principal two categories of duties: fiduciary and
general. The fiduciary duty is the duty to always act in the interest of the
principal. The general duty owed by the agent encompasses the types of
obligations any employee might have, this includes the duty of skill and
care, good conduct, to keep and render accounts, to not attempt
anything impossible or impracticable, to obey, and to give information.
The principal in turn also owes the agent certain duties in terms of the
agreement. These duties include: warning the agent of hazards
associated with the job, to avoid interfering with the agent’s performance
of his job, to render accounts of money due the agent, and to indemnify
the agent for business expenses according to their agreement.
The obligations of an agent
The agent to an agreement has the following residual obligations:
• to do what he or she has been instructed to do;
• to exercise care, skill and diligence;
• to impart information to the principal;
• not to disclose private information to third parties;
• to advise the principal;
• to act in good faith; and
• to account to the principal.
The duties of an agent depend primarily on the contract of agency. The
above residual duties will be discussed below.
Duty to perform the mandate
An agent is under a duty to perform his mandate fully and faithfully. If he
fails to do so, he not only forfeits his commission but also becomes liable
in damages to his principal. Generally, an agent may not delegate his
authority to another agent. Delegation is only allowed where the principal
has allowed it, either expressly or impliedly.
Duty to obey instructions
An agent must act strictly in accordance with the instructions of his
principal so long as they are lawful and reasonable. He has no discretion
to disobey them even if he honestly and reasonably regards them not to
be in the best interests of the principal. An agent is not liable for any loss
his principal may incur as a result of carrying out his principal’s
instructions. If, however, the agent fails to carry out the instructions, he
is liable for any loss suffered by the principal.
Duty to exercise care, skill and diligence
An agent must take reasonable care in carrying out his instructions and
must display such skill as may be reasonably expected.
Duty to account
The agent must record all transactions, payments, expenses and
receipts in connection with the execution of his authority in order to give
a proper account to the principal. The principal is entitled to inspect the
records held by the agent.
Duty not to disclose information
If during the execution of his authority an agent acquires secret
information concerning his principal he may not disclose it to third
parties. He may also not use such knowledge for his own purposes,
either at the time of the execution of the authority or at any time
thereafter.
Duty to act in good faith
There is a relationship of good faith between the parties. An agent must
at all time act in the exclusive interest of his principal and he may not act
in a manner that a conflict arises between his own interests and the
execution of his authority.
The agent is thus not allowed to make any secret profits in the
performance of his duties. If such unforeseen profits do materialise, he
must hand them over to his principal. The agent is only entitled to the
compensation as agreed upon, unless the principal gave him permission
to make additional profits or otherwise renounced his right to such
profits. The prejudiced principal is entitled to terminate the authority and
to claim damages.
The duty to act in good faith further entails that an agent may not accept
a bribe in the execution of his assignment. If the agent accepts a bribe,
then even if the principal suffers no loss, he is entitled to dismiss the
agent, recover the bribe, or his actual loss (whichever is greater) from
the agent and deny commission to the agent and repudiate any resulting
transaction.
The obligations of the principal
The principal’s residual obligations are:
• to pay the agreed remuneration, if any;
• to account; and
• if the agent is a mandatory, to indemnify the agent in certain
instances.
The duties of a principal depend primarily on the contract of agency. The
above residual duties will be discussed below.
Compensation
A principal is obliged to compensate an agent the amount agreed upon
and stated in the Agency Agreement.
Render accounts
A principal is obliged to render accounts of monies due to the agent. A
principal’s obligation to do so depends on a variety of factors, including:
the degree of independence of the agent, the method of compensation,
and the customs of the particular business. An agent’s reputation is no
less valuable than a principal’s, and so an agent is under no obligation to
continue working for one who damages it.
Duty to indemnify
Agents commonly spend money pursuing the principal’s business.
Unless the agreement explicitly provides otherwise, the principal has a
duty to indemnify or reimburse the agent.
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