Anyone buying or selling a property and engaging an estate agent in the process should be aware of how an estate agency agreement is legally validly concluded. In a recent judgement, the Federal Court of Justice has clarified that a commission notice appearing only below the salutation and the email signature has no legal effect. Consequently, a valid estate agent’s contract was not formed.
What had happened?
The sellers of a detached house had initially commissioned an estate agent to help them buy a new property. Later, the same estate agent also took on the task of brokering the sale of their existing house. All communication took place via email.
In one of these emails, the estate agent referred to ongoing negotiations regarding the purchase price and offered to continue acting as an agent. The message ended with the usual closing and the full signature. Only then, i.e. after the signature, did a general reference follow to a commission of up to 3.57 per cent of the purchase price upon successful completion of the sale.
The house was sold and the commission was paid initially. The sellers then demanded their money back, arguing that a valid estate agent’s contract had never been concluded.
The Federal Court of Justice’s ruling
The Federal Court of Justice ruled in favour of the sellers and upheld the claim for a refund. The basis for this is the requirement for written form set out in the German Civil Code, which applies to estate agency contracts for residential property. The requirement for written form under Section 126b of the German Civil Code (BGB) means that the declaration must be made in a legible form on a durable medium and it must be clear who is making the declaration and where it ends.
It was precisely on this last point that the estate agent failed. In the view of the Federal Court of Justice, the closing salutation followed by the full signature signals to the recipient that the main body of the message has ended. Whatever follows is, in the eyes of an objective reader, no longer part of the main text. A reference to commission in this section cannot therefore constitute a valid offer to enter into a contract.
The court also clarified that estate agent contracts may, in principle, be concluded informally or by email, including through conduct implying consent. However, this is subject to the condition that the statements clearly set out at least the following points: the contracting parties, the property in question or the intended main contract, and the amount of the commission. This information must appear in the body of the message itself, before the greeting and the names of the parties.
What does that mean in practice?
This ruling is reassuring for both property buyers and sellers: they can rest assured that automated clauses in email footers or signatures do not give rise to binding contractual obligations. Therefore, anyone who has not knowingly entered into a commission agreement is not obliged to pay.
Anyone working with an estate agent in practice should ensure that all key terms of the contract are clearly and fully set out in the body of the email. If in doubt, it is worth seeking legal advice before entering into an estate agency agreement to avoid any subsequent disputes over commission or the validity of the contract.
Federal Court of Justice (BGH), judgement of 11 March 2026, Case No. I ZR 202/25
Source: Haufe: Property
This post and the accompanying image were created with the help of AI and have been editorially reviewed.
