Question:
It has come to my attention that there are realtors who are alcoholics. If you suspect a realtor of being drunk while signing a deal what are the legal ramifications? All other parties being sober. Would they be considered being “of sound mind” – (one of the requirements for binding someone to a contract)?
Answer:
There is a risk of the agent not being competent at the time when they were intoxicated to enter into a valid agreement. That’s one of the reasons why a witness is required for many different contracts.
Here, the Ageement of Purchase and Sale (APS) is OK because both the Buyer and the Seller are fine. It doesn’t matter if your witness is drunk, in fact, you don’t even need a witness.
But, when it comes to the Confirmation of Coopertion and Representation (CCR) and the commission, that might be a different story. The Listing agent advertised a low commission. The Buyer’s agent requested an increase. The Listing agent appeared to agree and signed a CCR to that effect. A few days later, they sober up and dispute the higher commission to the Buyer’s representative, claiming, of course, that they were drunk at the time.
This leaves it open to a Court to set aside the CCR.
Brian Madigan LL.B., Broker