Can a Buyer Terminate the Standard Pennsylvania Buyer Agency Contract? Understanding the Limits of the PAR Exclusive Buyer Agency Agreement
The Pennsylvania Association of Realtors® (“PAR”) Exclusive Buyer Agency Contract is one of the most widely used forms governing the relationship between homebuyers and their real estate agents. While the agreement clearly establishes the agent’s right to represent the buyer and earn a fee, it is notably sparse when it comes to termination rights. This omission can create significant legal and practical issues when a buyer becomes dissatisfied with their agent.
This article explains (1) what the PAR Exclusive Buyer Agency Contract actually says about termination, (2) when termination is permitted under the contract itself, and (3) when termination may be justified based on a buyer’s agent’s breach of their duties under Pennsylvania law.
The PAR Exclusive Buyer Agency Contract Does Not Contain a General Termination Provision
Unlike many service contracts, the PAR Exclusive Buyer Agency Contract does not contain a standalone termination clause allowing either party to terminate “at will” or upon notice. Instead, the duration of the agreement is governed exclusively by Section 1(B), which defines the “Term” of the contract.
Section 1(B) provides that the contract continues for a defined period of time: “...until the expiration of the Term, or before if Buyer and Broker agree.”
This language is significant because it establishes only two contractual mechanisms for termination: (1) Expiration of the Term; or (2) Mutual Agreement of Buyer and Broker. Neither party has an express contractual right to terminate the agreement unilaterally without the other’s consent.
Critically, the PAR Exclusive Buyer Agency Contract does not provide any general right for a buyer to terminate the agreement based solely on dissatisfaction, inconvenience, or a desire to work with another agent.
Are there any other grounds under which a buyer may terminate the PAR Exclusive Buyer Agency Contract?
The PAR Exclusive Buyer Agency Contract itself does not include a unilateral termination clause, however, Pennsylvania law imposes fiduciary duties on buyer’s agents. If those duties are materially breached, the buyer may have grounds to terminate the buyer agency agreement based on breach of contract and breach of fiduciary duty.
These fiduciary duties arise from both the Pennsylvania Real Estate Commission’s regulations and the Real Estate Licensing and Registration Act and include:
Loyalty to the buyer by acting in a way that is consistent with the buyer's best interest in the transaction;
Confidentiality;
Making a continuous and good faith effort to find a property for the buyer except when the buyer is subject to an existing contract for sale; and
Disclosure to other parties in the transaction that the agent has been engaged as a buyer's agent. In the absence of a listing agent, this disclosure shall be made to the seller.
These regulatory duties reinforce the fiduciary nature of the buyer-agent relationship. They are mandatory professional standards governing the conduct of licensed real estate brokers and agents in Pennsylvania.
A buyer’s agent’s failure to comply with any of these duties may constitute professional misconduct and, in certain circumstances, a material breach of the agency agreement itself.
What might constitute a breach of these duties?
One of the most important of the above-listed fiduciary duties is the agent’s obligation to make a continuous and good faith effort to locate suitable properties for the buyer.
Examples of conduct that may constitute a breach of this duty include:
Failing to present available properties consistent with the buyer’s criteria;
Ignoring the buyer’s communications;
Refusing to schedule showings without justification;
Steering the buyer away from certain properties for the agent’s own financial benefit; and
Prioritizing other clients while neglecting the buyer entirely.
Such conduct may violate both regulatory and statutory duties and may constitute a material breach of the buyer agency agreement.
Does terminating the PAR Exclusive Buyer Agency Contract carry any risks?
If a buyer believes their agent has breached their fiduciary duties, the buyer may be able to terminate the PAR Exclusive Buyer Agency Contract unilaterally by providing written notice of breach. This notice should identify the specific conduct constituting the breach and state that the buyer considers the agreement terminated as a result.
However, unilateral termination carries legal risks.
An agent who disputes the alleged breach may claim that the agreement remains in force. Under Paragraph 2 of the PAR Exclusive Buyer Agency Contract, the agent may seek to recover their Broker’s Fee if the buyer purchases a property during the contract term—even if the buyer worked with another agent for the purchase.
This can lead to disputes over:
Whether a breach actually occurred;
Whether termination was legally effective; and
Whether the agent is entitled to compensation.
These disputes may ultimately require negotiation or litigation to resolve.
Conclusion: Buyers Should Proceed Carefully Before Attempting Unilateral Termination
The standard PAR Exclusive Buyer Agency Contract provides no general right for unilateral termination. Instead, termination is permitted only:
Upon expiration of the contract term; or
By mutual agreement of the buyer and agent.
However, Pennsylvania law imposes fiduciary duties on buyer’s agents, including duties of loyalty, confidentiality, disclosure, and making a continuous and good faith effort to locate properties for the buyer. If a buyer’s agent materially breaches these duties, the buyer may have grounds to terminate the agreement by providing notice of breach.
Unilateral termination of the PAR Exclusive Buyer Agency Contract may expose the buyer to claims for agent compensation and other legal consequences, therefore, buyers should proceed cautiously and consider consulting experienced legal counsel.
If you are experiencing difficulties with a buyer’s agent or have questions about terminating a PAR Exclusive Buyer Agency Contract, the real estate attorneys at Commons & Commons LLP can help evaluate your situation and protect your interests. Click here to get in touch with us.