A verbal promise made outside the agreement

The situation

A seller signed a Seller Representation Agreement listing a $615,000-range home, with a commission clause stating 5%. Partway through the listing presentation — before signing, according to the seller’s recollection — the agent allegedly said something like, “if we close within sixty days, I’ll drop it to four.” No note was made of this at the time, by either party, and it did not appear anywhere in the signed agreement.

The problem

The sale closed 54 days after listing — inside the seller’s remembered 60-day window. When the closing statement showed a 5% deduction, the seller objected, insisting the verbal promise controlled. The agent had no memory of making any such promise and denied it outright. Neither side had a text message, email, or signed addendum on the point — only two conflicting recollections of a conversation from months earlier.

The numbers

The sale closed at $615,000. At the written 5% rate, commission was $30,750; at the seller’s alleged 4%, it would have been $24,600. The dispute turned on a single $6,150 gap — not a large number in absolute terms, but large enough, and clear enough in its arithmetic, that neither side treated it as worth ignoring.

The rule that decided it

Treadstone Law’s primer on small-business contracts states the general Ontario rule plainly: “Contracts don’t have to be written or signed to be valid. A verbal deal or an email exchange can bind you.” A verbal promise to reduce a fee, made before signing, is not automatically unenforceable under ordinary contract law — if the seller could prove it happened, it might well have amounted to a binding modification. But the same primer names the real problem directly: a written agreement is “the difference between a clear deal and a ‘your word against mine’ dispute,” and RECO’s own framework compounds it — a representation agreement’s payment terms are required to be stated in writing in the agreement itself, which means the brokerage’s compliant file, its trust records, and its commission calculation all point to one number: 5%.

What it would have cost otherwise

If the agent had actually made the promise and simply denied it later, the seller’s only route to the $6,150 would have been proving a verbal contract modification against a signed written agreement that said the opposite — a genuinely difficult case to win on recollection alone, however honestly held. If the promise had instead been put in a follow-up email or a signed addendum at the time, none of this would have been a dispute at all: the written record would simply have controlled, the same way the 5% clause did here.

The tell

The tell was the moment the promise was allegedly made: during a listing presentation, verbally, with nothing following it up in writing before signature. Any commission adjustment discussed in conversation needs to make it into the signed agreement itself or a dated, signed addendum the same day — not because a verbal promise can never bind, but because an unwritten one has no way to survive a disagreement about whether it was ever made.

The outcome

The brokerage’s managing broker reviewed the file: the signed agreement stated 5%, no addendum or written communication mentioned 4%, and the agent maintained no such promise was made. Without independent evidence, the seller had no practical way to prove the verbal term, and ultimately accepted the 5% figure as billed rather than pursue a claim built entirely on an unrecorded conversation. The brokerage changed its own listing-presentation script the same quarter: any commission structure discussed verbally now gets summarised in a same-day follow-up email to the seller, whether or not it changes anything in the signed agreement.

Takeaways

• • A verbal promise is not automatically unenforceable under Ontario contract law — the problem is almost always proof, not form.
• • RECO requires a representation agreement’s payment terms to be in writing in the agreement itself. Anything discussed verbally and never documented has no way to override what the signed agreement says.
• • Follow up any verbal commission discussion with a same-day written summary, even an email, whether or not the terms end up different from the signed agreement. It costs two minutes and prevents exactly this dispute.
• • When a disagreement comes down to two people’s memory of one conversation, the written document wins by default — plan every material conversation as though it will eventually need to be reconstructed from paper.