On 25 November 2024, a judgment of the Rotterdam District Court was published in a dispute over the payment of commission for the sale of a yacht that was later cancelled (ECLI:NL:RBROT:2024:11566).
Facts presented
Two former spouses put their luxury yacht up for sale through a yacht broker while they were still married. The parties entered into a brokerage agreement under which the broker would be entitled to a fixed commission of €50,000 upon sale. At some point, a sales contract is entered into which lists the broker as such.
Shortly before the buyer has to transfer the agreed purchase price, seller 1 notifies the broker that the yacht is withdrawn from sale. The reason was said to be a confidentiality issue, especially the fact that the broker had sent seller 2 a copy of the signed sales contract at the latter’s request. Shortly thereafter, seller 1 removed the yacht from the broker’s harbour. The broker notifies seller 1 that there is a sales contract and that penalties will be forfeited if he fails to honour it. Seller 1 replies that he does not care about those costs. Eventually, seller 2 convinces her ex to go ahead with the sale anyway, but the buyer indicates that the sale is dissolved as regards it. The broker does not manage to change the buyer’s mind. Eventually, the yacht is put up for sale elsewhere
The broker claims payment of commission. Seller 1 claims damages from the broker for breach of his duty of care as a good contractor. The broker allegedly misunderstood seller 1’s communication that he was taking the yacht out of the sale, because seller 1 wanted the sale to go ahead, but not with the broker as intermediary. In addition, the broker had no mandate to communicate to the buyer that the sale would not go ahead, and the sellers can no longer claim performance from the buyer due to the broker’s wrongful cancellation of the sale.
Court considerations
The court considered that a broker is entitled to commission once a sales contract is concluded through his brokerage. The sellers therefore owe the agreed commission.
The court held that the broker had not breached his duty of care as a good contractor. Firstly, the court considered that the broker was in constant contact with seller 1 during the brokerage period and that he was entitled to interpret seller 1’s announcement – and the subsequent removal of the yacht – as meaning that both sellers wanted to cancel the sale. Secondly, the court considered that the broker was entitled to notify the buyer that the sale was not going ahead given his duty to inform all parties about developments regarding the sale of the yacht. Relevant here was that the broker only communicated what had objectively happened and that the buyer had to make an international payment soon. Finally, the court considered that the validity of the buyer’s termination of the sale was irrelevant to the liability of the commission and that the sellers were free to bring a claim against the buyer.
The court therefore upheld the broker’s claim for payment of the commission, and rejected the seller’s counterclaim.
Lessons learned
This case shows that, in principle, the owing of commission does not depend on the performance of the sales contract. However, the parties are free to make the liability for commission dependent on, for example, the transfer of the yacht to the buyer. If the sales contract is terminated prematurely in that case, the broker is nevertheless entitled to commission under Dutch law, unless the non-performance of the sales contract cannot be attributed to the principle (for example, if the sales contract is rescinded because the buyer does not pay the agreed purchase price on time).
The parties can only deviate from the aforementioned ‘unless’ provision to a limited extent. In case of a professional agency contract, Article 7:445 of the Dutch Civil Code stipulates that such a provision cannot be deviated from to the detriment of the agent.
We have extensive experience in drafting broker agreements and contracts for the sale of yachts, and litigating such contracts on behalf of yards, brokers and clients. If you have any questions about the content of such contracts or options to terminate or avoid their termination, please feel free to contact us.
