Kelly v. Cooper

Quick Summary

This case explains a simple rule: estate agents can work for many sellers at the same time. They must keep each client’s secrets. They do not have to share one client’s confidential information with another client, even if the information could affect price talks.

• Author: Gulzar Hashmi
• Location: India
• Published: 2025-10-25
• Keywords: duty to disclose, confidentiality

Issues

1. Must an estate agent tell a seller information learned while acting for another seller?
2. How do we balance disclosure duties with confidentiality duties?
3. Can an agent act for competing principals who want to sell similar properties?

Rules

• Implied Term: Estate agents may act for many competing principals in the same market.
• Confidentiality: Information from one principal stays confidential; the agent need not reveal it to another principal.
• Conflict Control: The law accepts this limited conflict so agents can do their job; disclosure cannot defeat confidentiality owed to others.

Facts (Timeline)

• Agency Created: Seller (plaintiff) hired the agents to sell his house for a commission; target price was about $3.5 million.
• Second Instruction: The same agents were also hired to sell the next-door house.
• Common Buyer: One buyer viewed both houses; bought the neighbouring house for about $2 million.
• Offer on Plaintiff’s House: The same buyer offered $2.5 million; after talks with the seller, the agents completed the sale.
• Dispute: Seller later learned about the neighbouring sale and said the agents should have told him, as it might affect price talks. He refused to pay commission; both sides sued.

Arguments

Judgment

The Privy Council held that the agents were not in breach. Estate agency work assumes multiple principals. A term is implied that the agent may act for competing sellers and must keep each client’s information confidential.

Even if the info about the neighbour’s sale could be “material,” the agents could not disclose it because it was confidential to the other principal. There was no proof that a special interest to buy both properties existed that would change the outcome.

Ratio Decidendi

Implied freedom + strict confidentiality: An estate agent may represent multiple competing sellers. Confidential information from one cannot be disclosed to another. Disclosure duties stop where confidentiality begins.

Why It Matters

• Sets a clean rule for property markets with many sellers and shared agents.
• Shows how courts balance materiality with confidentiality.
• Guides drafting of agency contracts and disclosure clauses.

Key Takeaways

• Agent can act for competing sellers—this is implied by law.
• Client secrets stay secret, even if another client would find them useful.
• Alleged “material info” cannot override confidentiality duties.
• Prove special interest or concrete impact to claim breach—mere suspicion is not enough.

Mnemonic + 3-Step Hook

Mnemonic: “COMPETE—KEEP—CONFIDE” — Agents may compete for many sellers, must keep secrets, and cannot confide one client’s info to another.

1. Ask: Is the info confidential to another client?
2. Check: Does implied term allow multiple principals?
3. Decide: If yes + confidential → no disclosure duty.

IRAC Outline

Glossary

Principal

The client who hires the agent to act on their behalf.

Confidential Information

Information received in trust that must not be disclosed without consent.

Implied Term

A term the law reads into a contract to make it work in practice.

FAQs

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