Brief Fact Summary. A real estate broker sought to recover a commission for a sale of real estate, which the sale was not consummated.
Synopsis of Rule of Law. The general rule regarding whether a broker is entitled to a commission from one attempting to sell real estate is that, absent special circumstances, the broker is entitled to a commission if he produces a customer who is ready, willing and able to consummate the deal under the terms and price given the broker by the owner.
Through a maze of conflicting facts and confusion of varying circumstances one clear rule has been established and that is that a broker in the absence of special circumstances is entitled to a commission if he produces a customer ready, able, and willing to buy upon the terms and for the price given the broker by the owner.
View Full Point of LawIssue. Are the Plaintiffs entitled to the commission?
Held. No. Judgment for Defendant.
The general rule regarding whether a broker is entitled to a commission from one attempting to sell real estate is that, absent special circumstances, the broker is entitled to a commission if he produces a customer who is ready, willing and able to consummate the deal under the terms and price given the broker by the owner.
The court found that under the facts presented here, the Plaintiffs are not entitled to a commission because there was no unconditional acceptance of the buyer by the seller.
This court adopted the following rule. When a broker is engaged by an owner to find a purchaser, the broker earns a commission when: (1) he produces a purchaser ready, willing and able to buy on the terms provided by the owner; (2) the purchaser enters into a binding contract with the owner to do so; and (3) the purchaser completes the transaction by closing title in accordance with the provisions of the contract.
If the deal is not consummated because of lack of financial ability on the part of the buyer, or other default of the buyer, then there is no commission as against the seller. However, if the failure of completion of the contract results from the wrongful act or interference of the seller, then commission must be paid.
Discussion. Notice that this case did not specify the reason(s) that the prospective buyer did not consummate the deal. One may infer, from the rule announced by the court in that the failure of the deal was not from any fault of the seller (Defendan