A stipulatio alteri is a legal term that refers to a provision or clause in a contract that states that one party will receive a benefit or commission, regardless of whether or not they were the cause or reason for the contract being fulfilled. It is often used in the context of real estate sales, where an estate agent may include a stipulatio alteri in a sale agreement, stating that they will receive commission regardless of whether or not they were the agent who actually brokered the deal.
The idea behind it is that the agent will receive a benefit for their work, even if the sale is completed through other means. In simple terms, it's a clause in a contract that allows a party to receive a benefit even if they didn't cause the contract to be fulfilled.
In an article written by Henk Delport, it is noted that a commission can be earned by an estate agent through a stipulatio alteri outlined in a sale agreement. This stipulatio alteri simply states that commission will be paid regardless of the agent's involvement in the sale. All that needs to be established is the terms of the stipulation, whether they are express or implied.
It is worth noting that there have been several legal cases that have established the validity of using a stipulation alteri in commission claims for estate agents. One notable example is the case of Jurgens Eiendomsagente v Shara, in which the South African court of appeals held that an agent could base their claim for commission on a provision in a sale agreement if the provision is a stipulatio alteri and the agent accepted the benefit.
Another case, Marock v Attacq Limited and Another, also dealt with the use of a stipulatio alteri, but with a slightly different angle. This case highlighted that for a stipulatio alteri regarding a real estate broker to be valid and enforceable, it is crucial that the contracting parties intend to confer a benefit to the third party, and that the beneficiary accepts the benefit. However, in this case, the court found that the agreement between the purchaser and seller lacked this intention, and therefore the broker could not claim commission using a stipulatio alteri and had to seek another legal remedy.
Rule 3.6 of the EEAB Code of Conduct (now referred to as Property Practitioner Code of Conduct) seems to contradict the use of a stipulatio alteri clause. However, it is important to note that the code of conduct may not be applicable in situations where the parties themselves (buyer and seller) elect to include this clause and intend for it to be binding, as case law has demonstrated.
As attorneys specializing in property law in South Africa, we provide our clients with expert legal advice throughout the buying and selling process.
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