A real estate agent made a typo error in the agent contract and the service fee turned from 160,000 yuan to 16,000 yuan. How do we determine the service fee? And how should we perform the agent contract?

[Case Review]

Ms. Huang bought an apartment through a real estate agent, and the signed agent contract states that Ms. Huang should pay the agent a service fee of 16,000 yuan. A few days later, the agent contacted Ms. Huang via WeChat, saying that the amount of service fee on the contract was wrong and it needed to be revised by adding a zero. Both sides agreed on WeChat that the service fee would be paid the way they had previously agreed on. That is, Ms. Huang would pay the agent 160,000 yuan, and the agent would return her 20,000 yuan, so the actual payment should be 140,000 yuan. However, on the day when the two sides had agreed to re-sign the agreement, Ms. Huang changed her mind and only agreed to pay 16,000 yuan to the agent. Despite his disagreement over the amount of the service fee, the agent still fulfilled all the obligations under the agent contract and saw to the transaction between the buyer and the seller.

Later, the real estate agency lodged a lawsuit with the Shanghai Jing¡¯an District People¡¯s Court (hereinafter referred to as the ¡°Court¡±). The agency said that after finding the typo error in the contract, the agency promptly informed Ms. Huang that the contract needed to be corrected and Ms. Huang did not object. It should be seen that both parties agreed that the service fee should be 160,000 yuan, so the agency required that Ms. Huang pay the rest of service fee and bear the penalty for overdue payment.

Ms. Huang argued that there was no typo error in the contract and that she had paid the service fee of 16,000 yuan as agreed.

[Case Study]

The Court found that according to the chat record between the two parties on WeChat, after the contract was signed, the agent did inform Ms. Huang of a typo error in the contract and negotiated with her about having it corrected. The two parties then reached a new agreement, which should be performed as agreed.

Accordingly, the Court ordered Ms. Huang to make up for the service fee of 140,000 yuan and pay liquidated damages for the overdue payment.

1. The court should identify ¡°typo errors¡± and identify the ¡°true intention¡±

Generally speaking, under the conditions stipulated by law, a contract shall become legally effective after being signed or sealed by the parties concerned. But if there is a ¡°typo error¡±, or even a lawsuit arising therefrom, how should the court deal with it?

In practice, the judge will take into consideration the communications, trading habits, and everyday experience of the parties before and after contracting, and identify the true agreement between them according to the principle of good faith, thereby judging whether there is a typo error in the contract. If it is a typo error, the principle of ¡°typo errors causing no harm to the true intention¡± will be applied. The content and validity of the contract shall be determined according to the true agreement of the parties, and the parties shall perform the contract in accordance with the true intention.

2. The client should conclude the contract with prudence and perform the contract in good faith

In the housing transaction, the client himself/herself is the ¡°first responsible person¡± on their side. Buying and selling houses is a big deal in people¡¯s life. Although the client entrusts an agency to provide professional services, they should conclude a contract with caution and will not be exempted from the basic obligations.

Integrity is gold, and one should never take advantage of the opposing party¡¯s ¡°typo error¡±. In being honest, one should stick to the truth from facts and perform the agreement accordingly. In this case, although the typo error was made by the agency, Ms. Huang¡¯s denial of the amount of the service fee that they had agreed on obviously violated the principle of good faith that should be followed in civil activities. Therefore, she had to make up the service fee according to the agreed amount and pay the damages for overdue payment.

3. The intermediary should report truthfully and be diligent and responsible

When providing intermediary services, intermediaries should act in good faith and due diligence, fully investigate and truthfully disclose matters related to the conclusion of the contract, provide professional guidance for housing transaction activities and truthfully inform the relevant information. In addition, in civil activities, an intermediary with specialized qualifications and professional information should bear a greater duty of caution and care. Matters such as contract signing should be reviewed by relevant departments to ensure the stability of transactions and avoid disputes like the one in this case.

[Relevant Laws]

Civil Code of the People¡¯s Republic of China

Article 119 A legally formed contract is legally binding on the parties to the contract.

Article 465 A legally formed contract shall be protected by law.

A legally formed contract is legally binding only on the parties to the contract, except as otherwise provided by law.

Article 509 The parties shall fully perform their obligations in accordance with the contract.

The parties shall abide by the principle of good faith and perform such obligations as notification, assistance, and confidentiality in accordance with the nature, purpose and customs of the contract.

In the course of performing the contract, the parties shall avoid wasting resources, polluting the environment, or damaging the ecology.

Article 585 The parties may agree that if a party breaches the contract, it shall pay a certain amount of liquidated damages to the other party according to the circumstances of the breach, and may also agree on the method for calculating the amount of damages resulting from the breach.

If the amount of liquidated damages agreed upon is less than the loss caused, the people¡¯s court or the arbitration institution may increase the amount at the request of the parties; if the amount of liquidated damages agreed upon is excessively higher than the loss caused, the people¡¯s court or the arbitration institution may, at the request of the parties, make an appropriate reduction.

Where the parties agree on liquidated damages for delay in performance, the defaulting party shall continue to perform its obligations after paying the liquidated damages.

Article 961 An intermediary contract is a contract whereby the intermediary informs the client of the opportunity to conclude a contract or provides intermediary services for the conclusion of a contract, and the client pays the remuneration.

Article 963 Where the intermediary facilitates the formation of a contract, the client shall pay remuneration in accordance with the contract. Where the remuneration of the intermediary is not prescribed or clearly prescribed, and cannot be determined in accordance with the provisions of Article 510 of this Law, it shall be reasonably determined based on the services provided by the intermediary. Where a contract is formed as a result of the intermediary¡¯s provision of intermediary services, the parties to the contract shall bear equally the remuneration of the intermediary.

If an intermediary facilitates the formation of the contract, the expenses of the intermediary¡¯s activities shall be borne by the intermediary.

(By: Dong Kun, Qiao Xuning and Liu Xiaoli, Shanghai Jing¡¯an District People¡¯s Court)