Facts
- A third party to an agency agreement sought to renew his commercial insurance contract with the defendant company (principal) via a broker
- In order to retain the third party as a customer, broker concluded the renewal under the agency of the claimant, with no effort on the part of the agent
- By doing this, the customer could pay a lower price for his renewal
Issue
- Could the agent claim commission on the insurance renewal from his principal?
Decision
- No
Reasoning
- An agent may only earn commission on a contract to which he is the “efficient cause” (effective cause)
- As the broker had carried out all of the work, no commission was payable to the agent, who had done nothing more than sign the agreement
