To be precise, if the defendants had referred the buyers to the plaintiff, he would not have been entitled to receive an additional 2% from the defendants, nor would he have had a vested right to receive 2% from the buyers (it even turned out that the buyers did not agree to enter into a brokerage agreement with him and pay him brokerage fees). The plaintiff's situation as a result of the breach should not be better than his situation had it not been for the breach, so that in the event that the agreement is fulfilled, he is not entitled to receive an additional 2%, and in the event that the agreement is breached, he is entitled to receive the same additional 2% from the defendants.
- In light of the aforesaid, it is also not possible to determine that an agreed compensation of 2% is reasonable in relation to the damage that could have been foreseen at the time of the conclusion of the contract as a probable result of the breach (section 15 of the Contracts Law (Remedies for Breach of Contract), 5731-1970). For when the plaintiff has no vested right to receive a brokerage fee of 2% from the buyer, an agreed compensation of 2% is not a probable result of the fact that the defendants did not refer the buyer to him.
In any event, when the contractual salary is 2%, then an agreed compensation of an additional 2%, which means doubling the contractual consideration, is not in a reasonable proportion to the damage that could have been seen at the time of the conclusion of the contract as a probable result of the breach.
- Clause 9 of the exclusivity agreement states:
"My above undertaking is based on the agent's undertaking to act to sell the property I own, to take care of my interests as a seller..."
Section 8 of the Realtors Law states:
"A real estate broker will act faithfully, fairly and in an acceptable manner."
The provisions in the exclusivity agreement, according to which the plaintiff informs the defendants (categorically) that he will charge a brokerage fee from the buyers, and the plaintiff's interpretation that he has a vested right to receive brokerage fees from both the defendants and the buyers (antitrust 4% plus VAT), is inconsistent with the plaintiff's duty to act faithfully and fairly towards the defendants, his customers, and may place him in a conflict of interest between his personal interest (legal fees) and the interest of the defendants (for the best deal).