Is the transaction still valid when my principal refuses to pay me commission/fee?
In an appointment to agency, the principal appoints the agent to enter into a binding contract with a third party. A common example is a landowner appoints an agent to sell his property to a third party.
When the work is done, the fee is due. However, if the principal disagrees to pay the fee, can the agent then say this deal of sale is then NOT VALID? Because the appointment has been frustrated or defective?
S.138 of Contracts Act, 1950 however says:
Consideration not necessary.
No consideration is necessary to create an agency.
Therefore, an agency can be established without any consideration (without fee for example). Thus, despite unpaid fee, the appointment was intact. The binding contract entered with the third party is unaffected.
Even, if the scenario that the landowner did not appoint the agent and the agent happened to close the deal, it could be ratified with the landowner. This is stated in S.149 of Contracts Act, 1950. When the agency is ratified, there is valid binding contract with the third party.
However, an agent appointed by law under Valuers, Appraisers, Estate Agents and Property Managers Act, 1981 can exercise his rights of S.22C (1) (d) to claim the money from the landowner:
(d) be entitled to recover in any court any fees, commissions, charges or remuneration for any professional advice or services rendered as an estate agent.