Article 962
The intermediary shall truthfully report to the client on matters related to the conclusion of the contract.
Where an intermediary deliberately conceals important facts related to the conclusion of a contract or provides false information, harming the interests of the client, it must not request payment of remuneration and shall bear the liability for compensation.
I. Purpose of this Article
This article is about the obligation of intermediaries to report truthfully.
II. Evolution of the Provisions
This article derives from Article 425 of the original Contract Law, which stipulates that "the intermediary shall truthfully report to the client on matters related to the conclusion of the contract." "Where an intermediary deliberately conceals important facts related to the conclusion of the contract or provides false information, harming the interests of the client, he shall not demand payment of remuneration and shall be liable for damages. Compared with Article 425 of the original Contract Law, this article has no other modifications, except that the words "intermediary", "demand" and "liability for damages" are changed to "intermediary", "request" and "liability" respectively.
3. Interpretation of Provisions
This article regulates the reporting and fiduciary duties of intermediaries.
It is the main obligation of the intermediary contract that the intermediary shall truthfully report to the client on the matters concerning the conclusion of the contract. In the reporting intermediary, the intermediary shall report to the client on the basis of the facts of the contract matters to the extent that it knows, and the intermediary has no obligation to report the relevant situation of the client to the counterparty. In the case of media intermediaries, the intermediary should report the matters relating to the contract to the parties on the basis of facts, and the reporting obligation of the intermediary is the reporting obligation to both parties.
The duty of loyalty refers to the obligation of the intermediary to abide by the principle of good faith for the intermediary activities carried out by the intermediary contract, whether it is unilateral or double, and shall not adversely affect the conclusion of the contract, affect the conclusion of the contract or damage the interests of the client, and have the obligation to keep confidential to others the information provided, the opportunity to conclude the contract and the subsequent contracting. Where an intermediary deliberately conceals important facts related to the conclusion of a contract or provides false information, harming the interests of the client, it must not request payment of remuneration, and if it causes damage to the client, it shall be liable for compensation.
4. Cases
Case of contract dispute between Wu and Zhou and Wang
Facts: The plaintiff Wu Moumou signed a house sale contract with the defendant Zhou Moumou on December 17, 2017 through the Lankao Lantong Real Estate Intermediary Service Department operated by Cao Moumou, paid the down payment and intermediary fee, and the defendant handed over the house key to the plaintiff. Later, when the plaintiff urged the defendant Zhou to transfer the property, it was learned that the house had been seized by the court because the defendant Zhou owed money, and the transfer could not be carried out, and the time of the seizure of the property was before the two parties signed the purchase contract. The plaintiff sued the defendant Zhou Moumou and his wife Wang Moumou to be jointly liable, and the Lankao Lantong Real Estate Intermediary Service Department operated by Cao Moumou should be jointly and severally liable for compensation due to the error in providing the purchase information. In addition, although the defendant Lankao Lantong Real Estate Intermediary Service Department failed to fulfill its obligation to truthfully provide the latest information on the housing in this case, it was only negligence and there was no subjective intention, so the defendant Lankao Lantong Real Estate Agency Service Department could receive labor remuneration and was not liable for the plaintiff's damages.
5. Analysis
The intermediary shall truthfully report to the client on the matters concerning the conclusion of the contract, which is the main obligation of the intermediary in the intermediary contract, and based on this obligation, the intermediary also has the right to claim remuneration. According to Article 962 of the Civil Code, the intermediary shall truthfully report to the client on matters related to the conclusion of the contract. Where an intermediary deliberately conceals important facts related to the conclusion of a contract or provides false information, harming the interests of the client, it shall not demand payment of remuneration and shall bear the liability for compensation. In this case, the intermediary Lankao Lantong Real Estate Agency Service Department failed to fully fulfill its reporting obligations and did cause the plaintiff's losses, but it did not deliberately conceal it, that is, it did not know that the house in question was seized by the court at the time of investigation, and there was no subjective intention, so it did not meet the conditions for refusing to pay the intermediary's remuneration as stipulated in this article, so the court did not support the plaintiff's claim.