Reference no: EM133015818

Question - RJ Booker, a real estate firm based in Milsons Point, Sydney, emailed Mimi. Mimi had a friend working at RJ booker and she told her that she wanted to sell her unit. The unit was located at the 19th floor of a modern apartment building located in Milson's Point, almost beside the entrance to Luna Park.

Gustavo, the franchisee and principal of RJ Booker in Milson's Point, asked Mimi if the firm can be her exclusive agents in the sale of her unit. Gustavo explained that if they located a qualified buyer, RJ Booker would be entitled to the standard Real Estate industry commission rates for agents. Currently, this was about 3 percent of the purchase price. Mimi agreed and signed the agency contract.

Within five days, Gustavo called Mimi and told her that he had found a buyer for her unit, Alisa. Alisa had told Gustavo that she was ready to buy Mimi's unit "as per contract" and "depending on the result of a property inspection". The very next day, Mimi received an email offer from a third party and she immediately accepted it without informing RJ Booker. When Gustavo found out, he insisted that Mimi should pay them a commission based on the selling price of the unit, stating that they did their job and found a good buyer for the unit. Mimi told Gustavo to get lost and that she will not pay their commission.

Advice Gustavo on whether Mimi was legally right in not wanting to pay RJ Booker a commission on the sale of her unit.