49 Of 174 documents

Corbin on Contracts

Copyright 2007, Matthew Bender & Company, Inc., a member of the LexisNexis Group.

PART I FORMATION OF CONTRACTS

TOPIC A OFFER AND ACCEPTANCE

CHAPTER 2 OFFERS; CREATION AND DURATION OF POWER OF ACCEPTANCE

1-2 Corbin on Contracts § 2.30

§ 2.30 Real Estate Brokerage and Other Agency Cases

[Go To Supp]

Brokerage Transactions Classified-Bilateral and Unilateral Contracts and Mere Invitations for Offers

There has been an immense amount of litigation with respect to the commissions of real estate brokers and other agents. This is due in part to the character of the business itself. Vendors and purchasers often feel that the commission charged is disproportionate to the service rendered. In large part, however, it is due to the fact that the terms of agreement between principal and broker are often expressed in vague form with no clear provision as to matters that become subjects of dispute. Much must be supplied from usages of the business that are none too well known or too definitely proved. Gaps must be filled by that uncertain process called ''implication,'' a mixture of determining the meanings of the parties by interpretation of their words and actions and of doing justice according to the mores and practices of the community. The legal relations of the parties must vary with the variation of the operative facts of the particular transactions, their complexity and variation being increased by the fact that at least three parties are always involved-a seller, a purchaser, and a broker.

In some cases the transaction between the principal and the agent is a bilateral contract. In the past, because of inadequate analysis and unfamiliarity with the ''unilateral'' contract, a transaction was often assumed to be thus bilateral. An owner who puts land in the hands of a broker for sale usually promises to pay a commission for the service. The broker seldom promises in return to produce a purchaser, although the broker may promise, expressly or impliedly to make diligent effort.n1 Where there is no express contract, courts have often failed to take note that a return promise can easily be implied, particularly in cases where the owner grants the agent an exclusive. In many of these cases, however, the same result has been reached on the question of irrevocability.n2 If the parties have thus made mutual promises, the transaction no longer has the status of an unaccepted offer, and neither party has a power of revocation. Any power of contracting with a third party in the principal's name that may have been given to the agent can be withdrawn by the principal, even though the principal may have contracted not to withdraw it, but this is not the revocation of an offer made to the agent. It is possible also, even though principal and agent have made a bilateral contract, for the principal to reserve a power of termination either by notice or by effecting a sale through other channels.n3

The cases with which we are now dealing include those in which an owner merely puts land in the broker's hands, promising a commission for the service of producing an able and willing purchaser, the broker making no return promise that he can or will produce such a purchaser. Such a transaction as this is an offer of a unilateral contract, an offered promise by the owner creating in the broker a power of accepting by actual rendition of the requested service. Such an offer as this may become irrevocable even before the service is fully rendered. Under what circumstances is the power, or the privilege, of revocation lost, and to what extent?

Transactions Classified-Property Merely ''Listed''

An owner who merely ''lists'' property with a real estate broker for sale or rent may thereby make no promise or offer of any kind. The communication to the broker may be no more than an invitation for the submission of proposals that the owner may or may not accept.n4 In such a case, the owner is legally privileged to reject any proposal so made. Upon such a rejection the owner is under no duty to pay the broker for services rendered, either a broker's customary commission or quantum meruit.n5

This may accord with the reasonable interpretation of the communications between owner and broker, even though the owner states a willingness to sell at a specific ''net'' price.n6 It is not wise to attempt to state a rule of law for determining whether such an interpretation is or is not the reasonable one.n7

If the owner when ''listing'' property for sale promises the broker to consummate the transaction and convey title to a purchaser whose offer may prove to be acceptable to the owner, it is not breach of contract to refuse to sell to a purchaser produced by the broker. The owner would be privileged to withdraw the ''listing'' at any time, the promise to convey being a mere ''illusory'' promise. But if the broker produces a purchaser whose offer is accepted by the owner, the broker has completed the service requested, the owner's promise to the broker to consummate the deal has become a unilateral contract, and a refusal by the owner to convey would be a breach of contract creating in the broker a right to a commission.n8 The promise to the broker is not within the real property statute of frauds;n9 but usually the question is not even raised.

Transactions Classified-Unilateral Contract, Promise of a Commission for Service Rendered

The most commonly recurring case is one in which the owner employs a broker to find a purchaser able and willing to buy, on terms stated in advance by the owner, and in which the owner promises to pay a specified commission for the service. This is an offer by the owner, the broker's power of acceptance to be exercised by the actual rendition of the requested service. Here the only contemplated contract between the owner and the broker is a unilateral contract-a promise to pay a commission for services rendered.n10

Cases are very numerous in which the owner, after the broker has fully performed the requested service, fails to make conveyance to the purchaser and refuses to pay the commission. Such a refusal is not the revocation of an offer. It is the breach of the fully consummated unilateral contract to pay for services rendered.n11 If the parties are silent as to the conditions to payment, it is generally held that the requested service is merely the production of a purchaser able and willing to buy on definitely stated terms,n12 and the broker has a right to the promised commission even though the owner at once refuses to accept the purchaser's offer.n13 It should never be forgotten, however, that the actual terms of the offer or contract, if inconsistent with the normal implications, control.n14

If the terms proposed by the owner contemplate the production of a purchaser who is willing and able to contract to purchase on specified conditions, the broker has earned the promised commission by producing one who offers to purchase on those conditions. This is true even though the consummation of the sale fails by reason of nonfulfillment of those conditions.n15 It is otherwise if the prospective purchaser produced is willing to purchase only on a condition not specified or assented to by the owner.n16

The owner's promise to the broker to pay a commission may itself be conditional, as where the promise is to pay ''on closing of the deal,'' or ''on settlement by the purchaser,'' or ''out of money received from the purchaser''. The additional event thus specified is no part of the performance by the broker, but it normally will be viewed as a condition precedent to the right to the commission.n17 Even in such a case the commission is earned if the owner prevents the fulfillment of the condition by refusing to convey on the terms to which the owner had previously assented.n18 The wrongful act of the owner excuses the condition to the broker's rights.n19 There are cases holding that the broker has a right to a commission if failure to consummate the sale is due to the owner's inability to convey the title agreed upon.n20 Every contract of sale, in the absence of agreement to the contrary, contains an implied warranty that marketable title will be conveyed. Generally, a contract by an owner with a broker contains the same implied promise.

Unilateral Contract-Promise for Service Rendered: Revocation

An offer of a promise to pay a commission for service rendered is revocable by the owner by notice before the broker has rendered any part of the requested service,n21 possibly also before rendering a ''substantial'' part of the service. A sale by the owner to a third party, with no notice thereof to the broker, is certainly not operative as a revocation.n22

In a good many cases of this kind it has been held that the owner is no longer privileged to revoke the offered promise after the broker has taken substantial steps in the process of rendering the requested service, by advertising the property for sale, soliciting prospective buyers, showing the property, or otherwise. In such a case the revocation and discharge of the broker is held to be a breach of contract.n23 There are cases contra to the foregoing and others not easily reconcilable with them.n24 These involve the problem that has just been discussed in § 2.29. It should be noted that owners frequently will retain a number of brokers to find a purchaser for the same property. When this occurs to the knowledge of the brokers, their efforts toward finding a purchaser should not be deemed to create irrevocable offers. They are well aware of the totally contingent nature of their commissions and should not be allowed recovery unless the nearly successful broker is in bad faith frozen out of the final steps leading to the contract between the owner and the purchaser, or has taken such other foreseeable steps in reliance on the contract as to make revocation unjust.n25

If the offer has been held open for a reasonable time, and the broker has failed to render the service after a definite attempt, the offer has been said to be revocable if the defendant is acting ''in good faith.''n26

The broker has often been held entitled to the commission (or to damages) in spite of the owner's notice of revocation given prior to completion of the broker's service, on the stated ground that the attempted revocation was ''in bad faith.'' If the notice of revocation is given when the broker's service has proceeded to the point where success is probable, the court may be convinced that it was given for the purpose of avoiding payment while at the same time enjoying the benefit of the service. Such a revocation is indeed ''in bad faith'', and the broker may be held entitled to the agreed commission on the ground that the owner has wrongfully prevented fulfillment of the condition precedent to the right to payment.n27 In some of these cases the court's theory is that the contract has become bilateral, although the facts as stated indicate no promise by the broker for breach of which the owner could have maintained an action. Often, however, the court merely holds that part performance by the broker has made the owner's promise binding.

In the cases as they are reported, it is often impossible to tell whether the court thinks that the agent promised to render services or not. Occasionally it is said that the contract becomes bilateral as soon as the agent has rendered part performance.n28 In such case, if the action were one brought by the owner for damages for the agent's failure to make diligent effort, it is far from certain that the court would be ready to find a promise by the agent. Such cases are best understood as groping towards the notion of an offer becoming irrevocable.

Even though the owner's promise of a commission may have become irrevocable as an offer to the broker himself, the law of agency is such that the agent's power to bring the principal into contract relations with third persons can be terminated by the principal even though it is a breach of contractual duty to terminate it. Although not legally privileged to do this, the owner has power to do it. After being notified not to proceed with efforts to sell, the agent's power (in the absence of an estoppel) to bind the principal to a third person is destroyed. It does not necessarily follow from this that the agent's power to complete the acceptance of the owner's offer is also terminated. The termination of the agent's power to bind the principal by a contract with a third person is an entirely different matter from the termination of the agent's power to bind the principal to render a performance (commission) that the principal has promised to the agent.n29

Amount Recoverable in Case of Wrongful Revocation

The amount recoverable is not the full amount of the promised commission unless the court is satisfied that the broker would have fully performed according to the owner's offer and this would have entailed no material expense.n30 In some cases the desired sale, or other specified result, is actually effected by the owner after the revocation, and the court is justified in finding that the broker's efforts were the ''producing cause'' thereof.n31 If it is not shown that successful completion of the requested service was highly probable but for the owner's discharge, the broker can recover nothing. The owner's promise to pay was conditional on substantial performance as specified.n32 The contract itself may provide for liquidated damages.n33 For example, it may provide, as quoted in one case, ''in case I withdraw the authority hereby given prior to said expiration date, I agree to pay you said commission just the same as if a sale had actually been consummated by you.'' Under some circumstances such a provision might be suspiciously akin to a penalty, but in the case quoted, the broker, at the time of discharge, had rendered substantial, and perhaps full performance.n34

Unilateral Contracts and the Ellsworth Dobbs Doctrine

In the great case of Ellsworth Dobbs, Inc. v. Johnson, n35 the Supreme Court of New Jersey, pronounced the general rule as to brokerage commissions to be ''deficient as an instrument of justice.''n36 In that case the defendants were owners of a 144 acre farm which they listed for sale on specified terms with the plaintiff and other brokers. Plaintiff produced an interested developer who, after some negotiations, entered into a contract of sale with defendant. The developer, however, defaulted because he was unable to raise the financing he had expected. Plaintiff sued both the sellers and the developer for a commission. Under prior precedents the plaintiff should have been successful against the sellers. The broker had fully performed and the purchaser's willingness and ability to perform conclusively established by the seller's entry into a contract with the developer produced by the broker. The court, quite consistently with the logic of the phrase ''willing and able'' to perform, overruled cases holding that the risk of the ability of the purchaser to perform shifts to the seller when the seller enters into a contract of sale. The risk quite properly belongs to the broker and the financial ability of the purchaser should be part of the broker's prima facie case. The court, however, went further than this, laying down a rule of much broader scope. The court stated: ''When a broker is engaged by an owner of property to find a purchaser for it, the broker earns his commission when (a) he produces a purchaser ready, willing and able to buy on the terms fixed by the owner, (b) the purchaser enters into a binding contract with the owner to do so, and (c) the purchaser completes the transaction by closing the title in accordance with the provisions of the contract. If the contract is not consummated because of lack of financial ability of the buyer to perform or because of any other default of his ..., there is no right to commission against the seller.'' In other words, as a condition precedent to the broker's right to a commission, the contract of sale must be performed, unless performance is thwarted by the seller's breach. The court declared that a provision in a brokerage contract prepared by the broker that would attempt to circumvent this ruling would be deemed unconscionable. In another precedent-breaking holding in the case, the court held that the defaulting purchaser could be held liable on an implied promise to the broker that, absent a legal excuse, the contract of sale will be completed.n37

Although it is still not the law throughout the land, those portions of the decision that hold, as between seller and broker, the broker has the burden of proof of the buyer's ability to pay, and places the risk of the purchaser's default on the broker, have found wide support.n38

''Exclusive Sale'' or ''Exclusive Agency''-Privilege to Sell Reserved by Owner; ''Exclusive Right to Sell''-Privilege Not Reserved

If the owner has given the broker an ''exclusive sale'' or ''exclusive agency,'' the conclusion is almost irresistible that the owner-broker relationship is a bilateral contract.n39 Even though the owner has made a bilateral contract with a broker, empowering the latter to find a purchaser and binding the former to pay a commission for the service, the actual understanding of the parties or the relevant usages of the business may be such that the owner remains legally privileged to find a purchaser and sell the property without liability to the broker. In such a case, the owner has no power to terminate the contract with the broker except by making an independent sale and giving notice of it to the broker. The owner has made no promise to the broker, expressly or by implication, not to make a sale to a purchaser found by the owner's own efforts. A mere refusal to consummate a sale by the broker and to pay the agreed commission would be a breach of contract.n40 Moreover, the owner's withdrawal of the property from the market within the period of time stipulated in the contract with the broker would be a breach entitling the broker to damages.n41

Again, the terms of the contract between the owner and the broker may be such that the latter does not have an ''exclusive agency''. The broker may have reason to know that the owner reserves the privilege of employing additional agents and consummating a sale through them. In this, as in the case just stated previously, the owner has made no promise not to consummate an independent sale.n42 In neither case, however, is the question one of revocability of an offer made by the owner to the broker. There was a contract between them, one not revocable by the owner. The question is merely as to the terms and conditions of the owner's promise, one to be determined by the usual processes of interpretation and construction.

If the owner made a promise to the broker to pay a commission for a specific service to be rendered, the broker making no promise in return to render that service, the owner's offered promise becomes an irrevocable unilateral contract as soon as the broker has rendered a substantial part of the requested service. This may be before the broker has procured a purchaser able and willing to buy on the owner's terms. Even so, however, just as in the case of a bilateral contract, the terms and conditions of the owner's promise to the broker must still be determined by process of interpretation and construction. That promise may not have excluded the owner's privilege of making a sale by the owner's own efforts or through another agent. If no such sale is made and the owner merely refuses to consummate a sale by the broker and to pay the agreed commission, the owner has committed a breach of contract. If the broker has been promised an ''exclusive agency,'' the promise is broken by making a sale through another agent but not by the owner's negotiating a sale without the aid of another agent. A promise that the broker shall have the ''exclusive right to sell'' or the ''exclusive sale'' would usually mean that the owner is not privileged to make any sale without paying a commission to the broker.n43

The principle applied in land brokerage cases is equally applicable to all offers to pay compensation for specified services to be rendered. It has been held that when a claim has been sent to a collection agency on a contingent basis, it is a breach of contract to withdraw the claim after efforts at collection already have been made.n44 Of course, the duty not to withdraw the claim would last only a reasonable time, in case there was no definite time allowed in the offer. Similarly, the discharge of a sales representative for the purpose of depriving the representative of commissions on sales orders already placed is in bad faith, subjecting the employer to liability for damages.n45

In Baumgartner v. Meek, n46 the owner listed her property with the plaintiff broker for a stated time, with ''the exclusive and irrevocable right to sell for $300,000,'' promising to pay a commission of 5% if ''the said property be sold by said broker or by me or by another broker.'' The broker expressly promised ''to use diligence in procuring a purchaser.'' After the broker had made much effort, advertised at considerable expense, and listed with other brokers, and before expiration of the stated time, the owner notified the broker that the property was withdrawn from the market and sold the property herself. The court held that these facts created a money debt of $15,000 to the broker and gave judgment therefor. The court said that the sale by the owner was not itself a breach and that the amount awarded was neither a penalty nor liquidated damages. A sale, whether by broker or by owner, was a condition precedent to the broker's right to the promised commission. On fulfillment of this condition, the amount promised became a money debt for the broker's services actually rendered. A sale by the broker herself would have created no such debt unless made on the terms stated in the contract. But on such a sale, or on any sale by the owner, the transaction became one fully performed by the broker and created a unilateral money debt.n47

Producing a Purchaser on Different Terms

There are cases in which a broker has been held to have a right to payment of the promised commission, even though the purchaser whom the broker produces is proposing to buy on slightly different terms from those authorized by the owner, in case the owner gives reasons for refusal to consummate the sale that are wholly different from the slight variation.n48 It is probably assumed in most of these cases that the owner and broker have made a valid bilateral contract and that the production of a purchaser is merely the performance of a condition precedent to the broker's right to the commission, and is not the acceptance of an offer to the broker resulting in a unilateral contract. On such an assumption, the slight variation may be regarded as immaterial, or else as a defect in performance that might have been cured but for the owner's refusal. Even though there was no bilateral contract between owner and broker, the same result may well be reached, the broker having gone far enough toward full performance to make the owner's offer irrevocable and to cause their transaction to take the form of a conditional unilateral contract. If the purchaser's offer contains a provision or is on a condition that differs materially from the owner's specified terms, the owner is justified in rejecting it without stating a reason, and the broker has not earned a commission.n49

Legal Topics:

For related research and practice materials, see the following legal topics:

Real Property LawBrokersBrokerage AgreementsContracts LawTypes of ContractsBilateral ContractsReal Property LawPurchase & SaleContracts of SaleGeneral OverviewContracts LawTypes of ContractsUnilateral ContractsGeneral Overview

FOOTNOTES:

(n1)Footnote 1. In Norman v. McLelland, 354 S.W.2d 906 (Mo.App.1962) , the defendant owner in consideration of $1, gave to the plaintiff an ''option to purchase'' a tract of land for $15,000, for a period of 6 months, both parties contemplating that the plaintiff would find a purchaser and keep what profit he could make. The plaintiff found a purchaser able and willing to pay $19,000. He gave notice exercising his option. The defendant repudiated his contract. The plaintiff was held entitled to $4,000 as damages for breach. Observe that this was not a brokerage contract. When the plaintiff gave notice of acceptance, he consummated a bilateral contract of purchase and sale, between himself and the defendant. The contract was a binding unilateral option that became a bilateral contract of purchase and sale.

(n2)Footnote 2. Hutchinson v. Dobson-Bainbridge Realty Co., 31 Tenn.App. 490, 217 S.W.2d 6 (1946) is a frequently cited case where part performance was held to make an offer to the broker irrevocable. Since the agency was exclusive, the court could have well held that the contract was bilateral and irrevocable at the outset. Had the bilateral contract been repudiated before any part performance, it is doubtful any damages could have been proved.

(n3)Footnote 3. See Tahir Erk v. Glenn L. Martin Co., 116 F.2d 865 (4th Cir.1941) .

(n4)Footnote 4. See Iacono v. Toll Bros., 217 N.J.Super. 475, 526 A.2d 256 (App.Div.1987) , aff'd, 225 N.J.Super. 87, 541 A.2d 1085 (1988) .

(n5)Footnote 5.

Del. - L.C. Parker Realtors, Inc. v. Dutch Village, Inc., 54 Del. 337, 179 A.2d 462 (1962) .

Md. - Rodblatt v. Fox, 191 Md. 620, 62 A.2d 548 (1948) .

N.J. - Bruni v. Posluszny, 56 N.J.Super. 525, 153 A.2d 739 (1959) , broker's commission expressly conditional on owner's signing of a lease and receipt of rent.

N.Y. - Fava v. Rasweiler, 279 App.Div. 770, 109 N.Y.S.2d 71 (1951) ; Reiner v. Ellinger, 29 Misc.2d 138, 216 N.Y.S.2d 560 (1961) , aff'd, 17 A.D.2d 803, 232 N.Y.S.2d 1022 , noted under § 768; Emil v. Hamburg Heaven, Inc., 16 A.D.2d 778, 228 N.Y.S.2d 353 (1962) , broker not entitled to commission when the owner consummated a sale of the property at a price higher than that which the broker had induced the purchaser to offer, owner and a subsequent broker not acting in bad faith.

In Devereaux v. Harper, 210 Cal.App.2d 519, 26 Cal.Rptr. 837 (1962) , the brokerage agreement provided for a commission of 5% for effecting a sale of a leasehold property on specified terms, some of these terms being such as to require further negotiation and assent by the seller. The broker produced an offer to purchase on the terms specified in the listing agreement. Since the seller and the purchaser were not alleged to have negotiated further and mutually assented, the broker had not earned his commission.

The text here is illustrated and supported by Ball v. Williamson, 336 Mass. 547, 146 N.E.2d 659 (1957) , holding that a broker who has merely been requested to submit offers, subject to acceptance or rejection at will, has no right to compensation, either as a commission or as quantum meruit, unless and until an offer submitted by the broker has been accepted. The owner is privileged to fix terms of sale, to retain the property, or to sell to a third person not introduced by the broker.

In National City Bank of Rome v. Graham, 105 Ga.App. 498, 125 S.E.2d 223 (1962) , the defendant owner informed the plaintiff broker that its property would be offered for sale through brokers and gave the broker a description of the property, who thereupon informed a third party that the property was for sale and offered his services in effecting a purchase. That party did not make use of his services, but made its own offer to buy the property direct to the defendant owner. The latter accepted the offer with no knowledge that the broker had contacted the purchaser. The owner was legally privileged to sell the property and was not bound to pay the broker a commission. Further, the purchaser was not bound to pay him a commission. See also § 3.17.

(n6)Footnote 6.

Conn. - Stagg v. Lawton, 133 Conn. 203, 49 A.2d 599 (1946) . In this case the purchaser produced by the broker had promised the broker a commission of 5 per cent, and the owner was aware of this fact when she refused to sell at the ''net'' price that she had given to the broker. Her refusal prevented the occurrence of a condition precedent to the broker's right to his commission from the purchaser. But she had not promised a commission, rather she had promised the broker that she would convey on given terms. This, the court thought, was a promise within the real property statute of frauds and, because oral, unenforceable. This broad reading of the statute of frauds produced an obvious injustice.

Somewhat similar cases are:

Cal. - Ford v. Brown, 120 Cal. 551, 52 P. 817 (1898) .

Mass. - Elliott v. Kazajian, 255 Mass. 459, 152 N.E. 351 (1926) (listing at $29,000 on terms satisfactory to sellers).

N.Y. - Allan Fox Co. v. Wohl, 255 N.Y. 268, 174 N.E. 650 (1931) , reargument denied, 256 N.Y. 554, 177 N.E. 137 (listing for exchange of lands; suit by successful broker entitles him to commission from reneging seller, but not to damages for lost commission that would have been obtained from other party to the exchange).

In Austin v. Richards, 146 Cal.App.2d 436, 304 P.2d 132 (1956) the defendant promised the plaintiff a broker's commission for procuring a purchaser on terms satisfactory to defendant. The plaintiff produced a purchaser, with whom the defendant closed a contract of sale on terms much less advantageous than defendant had desired. The court held that the closing of the contract by defendant with the purchaser was conclusive on the question of satisfactory terms, even though the price agreed upon might be so unfair as to preclude the purchaser from specific performance. The broker had a right to the commission.

(n7)Footnote 7. In Luxor v. Cooper, [1941] App.Cas. 108, [1941] 1 All E.R. 33, the House of Lords, with five opinions filling 50 printed pages, held that no promise by the owner should be ''implied,'' expressly approving the dissent of Scrutton, L.J., in Trollope v. Martyn, [1934] 2 K.B. 436. The trial court had found that certain other factors made the owner's refusal to consummate the sale just and reasonable. This had been reversed by the Court of Appeal. Although in the House of Lords these factors were not passed upon, they formed a background that might have affected the process of ''implication.'' In Jones v. Lowe, [1945] 1 All E.R. 194, the King's Bench felt constrained to follow Luxor v. Cooper although its own inclination was otherwise. The ''background'' was a different one. The judge's doubts as to the Luxor case are fully justified by the course of decision in the United States.

In Peizer v. Bergeon, 111 Ohio App. 205, 164 N.E.2d 790 (1960) the owner of mortgaged property promised a broker a commission of 10% if he would obtain a refinancing, on terms not specified, of existing mortgages. After the plaintiff made some unsuccessful efforts, the defendant himself secured refinancing on favorable terms and notified the plaintiff. The plaintiff then sued on a cognovit note for $700 given by the defendant in advance, claiming incorrectly that he had procured a commitment for refinancing before the revocation. Judgment on the note was denied.

(n8)Footnote 8.

U.S. - Calkins v. F.W. Woolworth Co., 27 F.2d 314 (8th Cir.1928) , cert. denied, 278 U.S. 645 ; T.C. Henry & Sons & Co. v. Colorado Farm & Live Stock Co., 164 Fed. 986 (10th Cir.1908) .

Ala. - Morgan v. Whatley & Whatley, 205 Ala. 170, 87 So. 846 (1921) .

Cal. - Turner v. Waldron Realty, 209 Cal.App.2d 376, 25 Cal.Rptr. 771 (1962) ; Justice v. Ackerman, 183 Cal.App.2d 649, 6 Cal.Rptr. 921 (1960) , the owner negotiated his own terms with the broker's prospect. In Alaimo v. Tsunoda, 215 Cal.App.2d 94, 29 Cal.Rptr. 806 (1963) , the defendant executed a writing in which ''in consideration of your listing my property and your efforts to find a purchaser'' the defendant gave the ''exclusive sale'' of the property to the plaintiff for six months and promised to pay a commission of 5% in case of finding a purchaser at such a price and on terms ''to which I may consent.'' The plaintiff found a purchaser at $240,000, but the defendant refused to sell at any price and withdrew the property from the market. The plaintiff sued for damages. The court held that the written agreement was too ''indefinite'' for enforcement. Even regarding the writing as an irrevocable offer, the defendant's acceptance of purchaser's offer was an express condition precedent to the plaintiff's right to a commission. It is certain that the listing agreement was not ''void''; the defendant would be bound to pay the commission if he made a contract to sell at any price during the 6-month period. Refusal of the $240,000 offer was not a breach, but the defendant's repudiation of the agency could be so regarded, without liability for substantial damages.

Colo. - Brewer v. Williams, 147 Colo. 146, 362 P.2d 1033 (1961) , broker produced a purchaser with whom the owner consummated a sale on terms satisfactory to her, intentionally avoiding participation by the broker; Chutkow v. Wagman Realty & Ins. Co., 80 Colo. 11, 248 P. 1014 (1926) .

Conn. - Norde v. Malash, 3 Conn.Cir. 37, 206 A.2d 661 (1964) , certif. denied, 152 Conn. 738, 205 A.2d 501 (owner orally accepted the buyer's offer, later rejected it, held liable for commission).

Iowa - Eells Bros. v. Parsons, 132 Iowa 543, 109 N.W. 1098 (1906) .

Mo. - Bird v. Blackwell, 135 Mo.App. 23, 115 S.W. 487 (1909) ; Cavender v. Waddingham, 2 Mo.App. 551 (1876) .

N.Y. - Pease & Elliman v. Gladwin Realty Co., 216 App.Div. 421, 215 N.Y.S. 346 (1926) ; Newman v. Pierson, 195 App.Div. 407, 186 N.Y.S. 388 (1921) .

N.C. - Atkinson v. Pack, 114 N.C. 597, 19 S.E. 628 (1894) .

Ohio - Lohr v. Ford, 94 Ohio App. 17, 114 N.E.2d 300 (1952) .

Wash. - Livermore v. Crane, 26 Wash. 529, 67 P. 221 (1901) .

In Bloomberg v. Greylock Broadcasting Co., 342 Mass. 542, 174 N.E.2d 438 (1961) , the defendant's president wished to sell its station to Hudson with whom his relations were such as to make a direct approach himself undesirable. He therefore employed the plaintiff to make the approach and to bring about a meeting, promising that if he did so and a sale was later consummated he would be paid a commission of 5%. The plaintiff procured the meeting, and much later a sale to Hudson was consummated, the plaintiff by express direction having no part in the negotiations. He was held entitled to the commission.

In Costilla Land Co. v. Robinson, 238 F.2d 105 (10th Cir.1956) the defendant promised to pay a broker's commission to the plaintiff if he would find a purchaser ready and willing to buy on stated terms. One of these terms was that the balance above a cash payment should be payable in annual installments ''for such terms of years as may be agreed upon'' between buyer and seller. A buyer was produced able and willing to buy on the stated terms and to negotiate the terms of the delayed installments. The defendant refused to negotiate as to these terms. A judgment for the plaintiff for the promised commission was sustained. Although actual agreement by the defendant on the terms was a condition precedent to the right to the commission, its fulfillment was prevented by the defendant's refusal in bad faith to negotiate with the buyer. The trial court found that the buyer ''was willing to negotiate on any reasonable terms as to the balance of the payments.'' Presumably, this means that he was ''willing to agree'' on any reasonable terms.

In Humphrey v. Knobel, 78 Nev. 137, 369 P.2d 872 (1962) , a broker was given ''exclusive sale'' of property for 60 days, by a written contract that specified ''Price, $31,500'', without stating particular terms of payment. The broker procured a purchaser who offered $30,000 on stated terms. The owner at first refused this offer and referred the purchaser to the broker. The latter suggested that the purchaser try again. The latter did so, and 14 days after expiration of the 60 days, the owner accepted an offer identical with that originally made. The court held that the broker had a right to the agreed 5% commission. The contract was described as a ''general'' listing, the stated price being merely an ''asking price'', such that the commission was promised if the broker produced a purchaser on terms satisfactory to the owner. See also § 559.

Even though a vendor's contract to sell may not be enforceable against the vendor for lack of a writing, the broker is entitled to a commission for producing a buyer able and willing to perform the contract of purchase, if the failure to consummate the sale is due to the vendor's refusal to sell. Curtis v. Mortensen, 1 Utah 2d 354, 267 P.2d 237 (1954) ; Woodbridge Realty v. Plymouth Development Corp., 130 Cal.App.2d 270, 278 P.2d 713 (1955) .

(n9)Footnote 9. In Vaughn v. McCarthy, 59 Minn. 199, 60 N.W. 1075 (1894) , the owner promised the broker that he would convey the land to a purchaser for $1 per acre net. It was expressly held that this promise was not within the statute of frauds. This is preferable to the holding in Stagg v. Lawton, note 6 above.

See Associated Agency of Bozeman, Inc. v. Pasha, 191 Mont. 407, 625 P.2d 38 (1981) .

See also Pacific Southwest Dev. Corp. v. Western Pac. R. Co., 47 Cal.2d 62, 301 P.2d 825 (1956) , noted herein under § 272. That an option contract to buy or sell land is within the statute of frauds, see § 418.

(n10)Footnote 10. Although the text focuses on real estate brokerage contracts, similar principles govern other brokerage cases. Yasuna v. National Capital Corp., 273 Md. 617, 331 A.2d 49 (1975) (broker retained to obtain financing).

(n11)Footnote 11. Larson v. Syverson, 84 S.D. 31, 166 N.W.2d 424 (1969) . On full performance by the broker, although the agency power of the broker is revocable, the offer is no longer revocable. It has ripened into a contract.

(n12)Footnote 12. The law in New Jersey is quite different from that stated in the text. The decision in Ellsworth Dobbs, Inc. v. Johnson, 50 N.J. 528, 236 A.2d 843, 30 A.L.R.3d 1370 (1967) , established new doctrine that has found acceptance elsewhere. See text at notes 35-38 below.

(n13)Footnote 13.

Cal. - Rivadell, Inc. v. Razo, 215 Cal.App.2d 614, 30 Cal.Rptr. 622 (1963) . Broker held not entitled to commission for failure to produce a specific purchaser on the exact terms of the listing, especially because the offer presented was on behalf of a named company ''or its nominee.'' The terms were in large part credit terms. The court thought that the broker was guilty of sharp practice in dealing with the less experienced owner. The listing had ambiguities justifying extrinsic explanatory evidence. The owner was justified in refusing the offer presented to him, even though he specified only part of the reasons and did not mention the ''nominee provision.''

Conn. - Tartoria v. Manko, 134 Conn. 345, 57 A.2d 493 (1948) ; Lawrence v. Hamilton, 111 Conn. 493, 150 A. 690 (1930) ; Leete v. Norton, 43 Conn. 219 (1875) .

D.C. - Gill v. American Security Corp., 209 A.2d 629 (D.C.App.1965) ; Deibler v. Graham, 62 A.2d 553 (D.C.1948) .

Ill. - Levit v. Bowers, 2 Ill.App.2d 343, 119 N.E.2d 536 (1954) , the owner may still refuse to sell, but he does not thereby escape from his legal duty to pay the agreed commission.

Iowa - Scott v. J.C. Ferguson R. Co., 206 Iowa 1158, 221 N.W. 785 (1928) , owner and purchaser rescinded.

La. - Womack Agencies, Inc. v. Fisher, 86 So.2d 732 (La.App.1956) , entitled to the commission, even though the final contract of purchase and sale was not made until after the date of expiration of the broker's contract.

Md. - Cowal v. Marletta, 216 Md. 222, 139 A.2d 712 (1958) , whether broker was the producing cause is a question of fact.

Minn. - Kaercher v. Schee, 189 Minn. 272, 249 N.W. 180, 88 A.L.R. 294 (1933) .

N.M. - Hatch v. Strebeck, 58 N.M. 824, 277 P.2d 317 (1954) , court carefully compares the terms of the written contract between owner and broker with those of the written contract of purchase signed by the purchaser and presented to the owner.

R.I. - Judge v. Roy, 90 R.I. 29, 153 A.2d 522 (1959) , defendant who promised commission even though not himself owner of the land.

If the broker produces a willing purchaser on the specified terms and the owner then executes a contract with the purchaser, the requirement of ability to pay is regarded as satisfied. The broker has a right to the commission even though the purchaser later defaults, unless the owner's promise was conditional on consummation of the sale. Richards v. Gilbert, 336 Mass. 617, 146 N.E.2d 921 (1958) ; Retterer v. Bender, 106 Ohio App. 369, 154 N.E.2d 827 (1958) ; Wauwatosa Realty Co. v. Paar, 274 Wis. 7, 79 N.W.2d 125 (1956) .

As to method of proving customer's ability to pay, see Driscoll v. Bunar, 328 Mass. 398, 103 N.E.2d 809 (1952) .

This section is cited in Benway v. Cole, 99 N.H. 51, 104 A.2d 734, 735 (1954) , holding that the owner must pay commission to one whose services as agent in finding a purchaser were accepted with knowledge that a commission was expected.

(n14)Footnote 14. Childs v. Ragonese, 296 Md. 130, 460 A.2d 1031, 38 A.L.R.4th 160 (1983) .

(n15)Footnote 15.

Mich. - Lee v. Desenberg, 2 Mich.App. 365, 139 N.W.2d 916 (1966) (seller settled specific performance action for a sum of money and retention of the land).

N.J. - George H. Beckmann, Inc. v. (Zinke's) Rainbow's End, Inc., 40 N.J. Super. 193, 122 A.2d 519 (1956), noted herein under § 768.

(n16)Footnote 16.

Cal. - Dexter v. McManus, 188 Cal.App.2d 312, 10 Cal.Rptr. 336 (1961) , tenant produced by the plaintiff broker refused to execute a lease unless a new provision not satisfactory to the defendant owner was included.

D.C. - Pastor v. Williams, 135 A.2d 460 (D.C.App.1957) , see also Jacobs v. Schneider, 152 Cal.App.2d 452, 313 P.2d 142 (1957) noted under § 2.1.

Conn. - Menard v. Coronet Motel, Inc., 152 Conn. 710, 207 A.2d 378 (1965) (on condition that purchaser sell his own property by a specified date).

Md. - Borowski v. Meyers, 195 Md. 226, 72 A.2d 701 (1950) , citing Dotson v. Milliken, 209 U.S. 237, 28 S.Ct. 489, 52 L.Ed. 768 (1908) ; Cooper v. Liberty Nat. Bank, 332 Ill.App. 459, 75 N.E.2d 769 (1947) ; Bell v. Siwoff, 124 N.J.L. 563, 12 A.2d 881 (1940) , aff'd, 123 N.J.L. 11, 7 A.2d 826 . See also § 768.

Miss. - Shemper v. Latter & Blum, 214 Miss. 113, 58 So.2d 359 (1952) , promise of a commission for obtaining a building construction loan, commission not earned by obtaining a loan good only after completion.

Of course, a broker does not earn his commission by finding one who merely takes an option to buy and never exercises it. Hedges v. Keas, 180 Kan. 540, 306 P.2d 181 (1957) , opinion amended and reh'g denied, 181 Kan. 503, 313 P.2d 264 . A broker, who produces a purchaser for a tract of land whose offer is conditional on the vendor's giving him an option to buy other land, was held not entitled to a commission on the sale of such other land when the purchaser exercised the option so given by the vendor. The broker did not produce a purchaser of the other land. He did not even produce a party who offered to buy it or who bound himself in any way. The option was merely an irrevocable offer by the vendor, an offer later accepted by the purchaser when it so pleased him. Baldwin v. Carroll, 101 So.2d 762 (La.App.1958) . See note on this case under § 543.

(n17)Footnote 17. See Amies v. Wesnofske, 255 N.Y. 156, 174 N.E. 436, 73 A.L.R. 918 (1931) ; Tarbell v. Bomes, 48 R.I. 86, 135 A. 604, 51 A.L.R. 1386 (1927) .

In Hersh v. Kelman, 104 N.E.2d 35, 61 Ohio L.Abs. 363 (Ohio App.1951) , the broker's right to a commission was conditional on ''consummation'' of the sale.

Vernon D. Cox & Co. v. DiMarco, 201 Pa.Super. 596, 193 A.2d 842 (1963) involved an agreement by owner to pay broker a commission ''at the time of final settlement'' merely fixed a time for payment, and did not make completion by the purchaser a condition precedent to the owner's duty to pay the commission. The purchaser had been held justified in refusing to complete by reason of the owner's breach of warranty against restrictions. As an alternative ground, the court could properly have found that a similar warranty was implicit in the owner's contract with the broker.

(n18)Footnote 18.

Ala. - Penney v. Speake, 256 Ala. 359, 54 So.2d 709 (1951) , prevention by owner. See also § 768 herein.

Cal. - Sill v. Ceschi, 167 Cal. 698, 140 P. 949 (1914) ; White v. Reskin, 90 Cal.App. 512, 265 P. 1016 (1928) .

Colo. - Scott v. Huntzinger, 148 Colo. 225, 365 P.2d 692 (1961) , owner gave an option and promised to pay a commission if the party consummated a purchase in accordance with the option.

Conn. - Home Banking & Realty Co. v. Baum, 85 Conn. 383, 82 A. 970 (1912) .

Fla. - Hart v. Pierce, 98 Fla. 1087, 125 So. 243 (1929) ; Lindquist v. Burklew, 123 So.2d 261, (Fla.App.1960) , noted at length under § 768, commission only on condition of performance by the purchaser.

Mass. - Ward v. Cobb, 148 Mass. 518, 20 N.E. 174 (1889) ; Cf. is Staula v. Carrol, 312 Mass. 693, 45 N.E.2d 822, 144 A.L.R. 919 (1942) , a ''net price'' case.

Mich. - Tyson v. Herrle, 354 Mich. 298, 92 N.W.2d 292 (1958) , commission ''on completion of the deal.''

N.Y. - Amies v. Wesnofske, supra.

Pa. - Blau v. Kettling, 94 Pa.Super. 411 (1928) .

In Weber v. Dobyns, 193 Cal.App.2d 402, 14 Cal.Rptr. 103 (1961) , the court held that a broker does not lose the right to a commission, merely because the vendor and purchaser rescind their contract of purchase and sale after the broker has fully performed the service for which the commission was promised. Even if the commission was payable out of the purchase price as received, the voluntary act of the owner in assenting to a rescission, thus preventing such receipt, should eliminate the condition precedent unless the owner clearly reserved the privilege of such prevention. See § 767, § 768.

(n19)Footnote 19. This basic principle seems to have been lost sight of in Centerco Properties, Inc. v. Boulevard Investment Co., 795 S.W.2d 521 (Mo.App.1990) . The owner promised a commission ''if and only if, closing occurs and Seller receives payment of'' a specified post-closing installment. Closing took place, but the buyer discovered defects and successfully brought a rescission action based on the seller's fraud. It was held that the failure of condition (payment of the installment) precluded the broker's recovery. No argument seems to have been made that the condition was excused.

(n20)Footnote 20.

U.S. - Weltman's, Inc. v. Friedman, 102 F.Supp. 485 (D.D.C.1952) , wife refused to join.

Conn. - Clark v. H. G. Thompson Co., 75 Conn. 161, 52 A. 720 (1902) .

Mass. - Fitzpatrick v. Gilson, 176 Mass. 477, 57 N.E. 1000 (1900) .

N.Y. - Stern v. Gepo Realty, 289 N.Y. 274, 45 N.E.2d 440 (1942) .

Tex. - Peters v. Coleman, 263 S.W.2d 639 (Tex.Civ.App.1953) , ref. n.r.e., vendor's wife refused to join in conveyance.

See further § 768.

In Sherwood v. Gerking, 209 Or. 493, 306 P.2d 386 (1957) , a broker procured a purchaser able and willing to buy on the owner's stated terms. Actual sale to this purchaser was prevented because a lessee had a preference right to buy on those terms and purchased the property. The broker was held to have been the efficient cause of the sale to the lessee and was entitled to his commission. See also note on this case under § 505.

(n21)Footnote 21.

U.S. -See Tahir Erk v. Glenn L. Martin Co., 116 F.2d 865 (4th Cir.1941) .

N.J. - Rose v. Minis, 41 N.J.Super. 538, 125 A.2d 535 (1956) , so-called ''option'' was not a contract; it was merely a revocable offer. See note under § 263.

Tenn. -In Jenkins v. Vaughan( 197 Tenn. 578, 276 S.W.2d 732 (1955) , irrevocable as soon as the broker ''has spent time and money'' and ''rendered a substantial part of the requested performance.''

Va. - Hummer v. Engeman, 206 Va. 102, 141 S.E.2d 716 (1965) (exclusive listing for 30 days held revocable before performance as unilateral contract with no consideration to support holding offer open for that period).

Wis. - Schoenmann v. Whitt, 136 Wis. 332, 117 N.W. 851 and note (1908), revocation before any substantial action by the broker.

In Pastras v. Oberlin, 350 Mich. 183, 86 N.W.2d 264 (1957) , property was listed with a broker, for a period of six months, with a promise to pay a commission of 10 per cent in case of a sale within that period at $11,000. The broker reported that he had a purchaser willing to pay $9,500. Whereupon, the owner informed him that he no longer desired to sell. This was held to be an effective revocation of the owner's offered promise to the broker, an offer that could be accepted only by actual production of a purchaser on the terms specified. The revocation was ''in good faith'' and not to avoid payment of a commission. Later, the broker found a purchaser at $11,000; but he had no right to a commission.

In Giraldin Bros. Real Estate Co. v. Stiansen, 315 S.W.2d 636 (Mo.App.1958) an owner signed a writing appointing plaintiff an exclusive agent to procure tenants and promising a stated commission. The plaintiff made no return promise and made no effort to procure a tenant, claiming a commission as to a lease otherwise procured by the owner. See note on this case under § 577.

(n22)Footnote 22.

Conn. - Tartoria v. Manko, 134 Conn. 345, 57 A.2d 493 (1948) .

In Bartlett v. Keith, 325 Mass. 265, 90 N.E.2d 308 (1950) , the owner made a sale to a party not contacted by the broker and notified the broker.

(n23)Footnote 23.

U.S. - Tahir Erk v. Glenn L. Martin Co., 116 F.2d 865 (4th Cir.1941) ; Calkins v. F.W. Woolworth Co., 27 F.2d 314 (8th Cir.1928) , cert. denied, 278 U.S. 645 (1929) ; Gaylen Machinery Corp. v. Pitman-Moore Co., 273 F.2d 340 (2d Cir.1959) , order for goods received the next day after notice revoking the agency.

Ark. - S. Blumenthal & Co. v. Bridges, 91 Ark. 212, 120 S.W. 974 (1909) .

Cal. - Sill v. Ceschi, 167 Cal. 698, 140 P. 949 (1914) ; Kimmell v. Skelly, 130 Cal. 555, 62 P. 1067 (1900) ; Blumenthal v. Goodall, 89 Cal. 251, 26 P. 906 (1891) ; Wilson v. Roppolo, 207 Cal.App.2d 276, 24 Cal.Rptr. 437 (1962) .

Conn. - Firszt v. Wdowiak, 104 Conn. 744, 133 A. 586 (1926) ; Harris v. McPherson, 97 Conn. 164, 115 A. 723, 24 A.L.R. 1530 (1922) .

Iowa - Attix v. Pelan, 5 Iowa 336 (1857) .

Kan. - Russell v. Combs, 108 Kan. 411, 195 P. 605 (1921) ; Braniff v. Blair, 101 Kan. 117, 165 P. 816 (1917) .

Md. -In Sanders v. Devereux, 231 Md. 224, 189 A.2d 604 (1963) , the defendant owner listed property with a number of brokers for sale on stated terms. The plaintiff broker was requested to try to effect a sale to a specified purchaser to whom the plaintiff had already shown the property. The wife of that prospect was herself a broker and tried to get the plaintiff to split the commission; her request was refused. Thereafter, a sale to this purchaser was consummated, without notice to the plaintiff, the purchaser's wife taking the commission and returning one half of it to the owner. The latter, however, required the purchaser to indemnify him against a claim by the plaintiff. The jury was justified in finding that the plaintiff was the producing cause of the sale and was entitled to judgment even though the owner ''in bad faith'' revoked the agency before final consummation of the sale.

Mass. - Goward v. Waters, 98 Mass. 596 (1868) .

Mich. - Axe v. Tolbert, 179 Mich. 556, 146 N.W. 418 (1914) ;

Ladd v. Teichman, 359 Mich. 587, 103 N.W.2d 338 (1960) , broker had right of ''exclusive sale,'' entitled to commission when owner sold an ''easement of way'' to a power company.

Minn. - Lapham v. Flint, 86 Minn. 376, 90 N.W. 780 (1902) .

Miss. - Sunflower Bank v. Pitts, 108 Miss. 380, 66 So. 810 (1914) , the owner had promised to pay if he should himself make a sale.

Mo. - Mercantile Trust Co. v. Lamar, 148 Mo.App. 353, 128 S.W. 20 (1910) .

N.J. - Kruse v. Ferber, 91 N.J.L. 470, 103 A. 409 (1918) .

N.Mex. - Marchiondo v. Scheck, 78 N.M. 440, 432 P.2d 405 (1967) .

N.Y. -Stillman v. Mitchell, 2 Rob.Sup.Ct.R. 523 (1864), affirmed 36 N.Y. 235 (1867) .

Ohio - Richter v. First Nat. Bank, 82 Ohio App. 421, 80 N.E.2d 243 (1947) ; Bell v. Dimmerling, 149 Ohio St. 165, 78 N.E.2d 49 (1948) .

Okl. - Cloe v. Rogers, 31 Okla. 255, 121 P. 201 and note (1912), owner has power to revoke, but not the privilege.

Tex. - Park v. Swartz, 110 Tex. 564, 222 S.W. 156 (1920) .

Va. - Epes v. Hardaway, 135 Va. 80, 115 S.E. 712 (1923) .

W.Va. - Alexander v. Sherwood Co., 72 W.Va. 195, 77 S.E. 1027 note (1913).

In Great Lakes Steel Corp. v. Baysoy, 52 Del. 340, 157 A.2d 902 (1960) the court held that there was evidence to sustain a verdict for a broker to the effect that he was the producing cause of a sale by the defendant of Quonset storage houses to the Turkish Government. The defendant had authorized plaintiff to induce such a sale with a promise of 5% commission. Negotiations continued throughout four years, with bids, rejections, new specifications, until finally a contract of sale was consummated directly between defendant and Turkish officials. The plaintiff had been active throughout, but there had been lulls in the process. The jury was justified in finding that there had been no ''substantial break in the negotiations,'' no termination of the plaintiff's efforts, and no termination of his authority as agent. The broker's authority was not limited to the procurement of an order on any specified terms.

See Bell v. Dimmerling, 149 Ohio St. 165, 78 N.E.2d 49 (1948) : ''In consideration of your agreement to use your efforts in finding a purchaser ... I hereby grant you the exclusive right for 90 days to sell... If you are successful in finding a purchaser or if the same is sold within the term of your exclusive agency ... I agree to pay commission of 5%.'' It does not appear whether the agent, as well as the owner, signed the instrument; but the court treats the contract as ''unilateral,'' made binding and irrevocable by the agent's mere ''efforts'' to find a purchaser.

''It is true the instrument appointing plaintiff agent was not signed by it, but the testimony shows it acted under the instrument and advertised the property extensively; this made the agreement bilateral''. Mercantile Trust Co. v. Lamar, 148 Mo.App. 353, 128 S.W. 20 (1910) .

See Restatement (Second) of Contracts § 45 and comment g thereto.

(n24)Footnote 24.

Mass. - Zakszewski v. Kurovitzky, 273 Mass. 448, 173 N.E. 503 (1930) , opinion very short and inadequate. See also Elliott v. Kazajian, 255 Mass. 459, 152 N.E. 351 (1926) .

Minn.- Stensgaard v. Smith, 44 N.W. 669, 19 Am.St.Rep. 205 (1890) , facts stated in note 28 infra.

In Tetrick v. Sloan, 170 Cal.App.2d 540, 339 P.2d 613 (1959) , the defendant gave to the plaintiff broker a writing authorizing him ''to negotiate a new lease ... on my property,'' on stated terms, without time limit. After the broker had contacted several possible lessees but before any agreement on terms or any specific offer by anybody, the defendant gave written notice to the plaintiff revoking his authority. About four months thereafter, the defendant himself leased the property to a company that had been contacted by the plaintiff. The court held that the revocation was effective and that the plaintiff had no right to any commission or compensation. It held that the authority was an offer of a unilateral contract but was not made irrevocable by the broker's efforts to ''negotiate'' a lease. The court differentiated a ''general listing,'' such as this one, from promises by an owner to a broker giving to the latter either an ''exclusive agency'' or an ''exclusive right of sale'' for a specified period. In these latter cases, although they too involved an offer of a unilateral contract, the offer would be rendered irrevocable by the broker's substantial action in reliance.

In Slaughter v. Stafford, 51 Del. 168, 141 A.2d 141 (1958) , the owner's revocation of his broker's authority to sell land on stated terms was held to be effective if notice was given before the broker actually produced a purchaser on those terms. The revocation was held not to be in bad faith even though the broker produced the purchaser very soon after the notice and even though the owner later sold the property to the same purchaser at a larger price through another broker. The owner had some cause for dissatisfaction with the first broker's conduct. The ''authority'' was not in writing, was not ''exclusive,'' and did not specify the commission. Compare also Phs. Van Ommeren Shipping, Inc. v. International Bank, 196 F. Supp. 200 (S.D.N.Y.1961), a complex case in which the plaintiff, on the defendant's advice, began work at once and obtained one contract of affreightment but not yet a ship charter. The court said, contra to Restatement, Contracts, § 45, that the offer was revocable as long as the offeree (plaintiff) had not ''completed performance.'' The plaintiff asserted that it would have found the ships except that it was prevented by the defendant's refusal to finance. The court holds that this was immaterial for the reason that the defendant was privileged to revoke even after plaintiff's part performance. This reasoning is not supported by this treatise.

(n25)Footnote 25. Nily Realty v. Wood, 272 Md. 589, 325 A.2d 730 (1974) . Nily asked the court to apply the rule of Wood v. Lucy, Lady Duff-Gordon, 222 N.Y. 88, 118 N.E. 214 (1917) , implying a promise by the broker to use best efforts to sell, so as to make the contract bilateral, and prevent the lister from withdrawing the agency after the broker had gone to trouble and expense to interest a buyer. The court refused because the agency here was not an exclusive agency, unlike the agency in Wood v. Lucy. The court pointed out that the owner might be subject to multiple liability. In this case the owner had listed with nine other brokers and had cancelled them all.

In Rellinger v. Bremmeyr, 180 Mich.App. 661, 448 N.W.2d 49 (1989) , the plaintiff-broker learned from a multiple listing service, of which he was not a member, that defendant had certain business property for sale. He produced an offer. The defendant made a counter-offer, giving the plaintiff three days in which to obtain an acceptance. During this period, the vendors obtained an offer, which they accepted, from another party and revoked the counter-offer they had committed to plaintiff. The court ruled that the plaintiff was not entitled to a commission. The broker throughout must have known the highly contingent and competitive situation.

(n26)Footnote 26.

U.S. - Wood v. Hutchinson Coal Co., 85 F.Supp. 1010 (N.D.W.Va.1949) .

Md. - Livezy v. Miller, 61 Md. 336 (1883) .

Mass. - Cadigan v. Crabtree, 186 Mass. 7, 70 N.E. 1033 (1904) ; Livingston v. George McArthur & Sons, 332 Mass. 83, 123 N.E.2d 379 (1954) , revocation in good faith held effective although after indefinite negotiations by the agent with a purchaser who bought much later.

N.Y. - Sibbald v. Bethlehem Iron Co., 83 N.Y. 378, 38 Am.Rep. 441 (1881) .

W.Va. - Alexander v. Sherwood Co., 72 W.Va. 195, 77 S.E. 1027 (1913) .

Compare Roudebush Realty Co. v. Toby, 99 Ohio App. 524, 135 N.E.2d 270 (1955) . The defendant, by a written instrument, gave to the plaintiff an ''exclusive agency'' for the sale of lots on which the defendant should build houses. The writing stated nothing as to its duration; and no promise by the plaintiff is alleged. Two houses were so built and were sold by the plaintiff. A third house was begun; and for several months the plaintiff ''expended time, effort and money in an attempt to sell.'' The defendant then wrote saying that if the house was not sold by a stated time, he would terminate the agency. The plaintiff continued efforts after that date and until the defendant gave definite notice of termination. At that time the defendant sold the house to a purchaser not produced by plaintiff. The court held that the plaintiff had a right to a commission of $1,000. The agency was held to be irrevocable for a ''reasonable time.'' The court said: ''By reason of the extensive services of plaintiff, mutuality of consideration is not lacking, and defendant was estopped to revoke the agreement before the expiration of a reasonable time.'' In addition the court held that parol evidence was admissible to prove that at the time the writing was executed the defendant had agreed orally that the agency should continue until the property was sold; this was on the theory that the writing was incomplete on its face, since no time or method of termination was stated.

(n27)Footnote 27.

Colo. - Fender v. Brunken, 534 P.2d 347 (Colo.App.1975) .

Mass. -In Malloy v. Coldwater Seafood Corp., 338 Mass. 554, 156 N.E.2d 61 (1959) , the court held that it was for the jury to say whether or not the defendant's revocation of the plaintiff's authority and termination of his agency was ''in bad faith'' to avoid payment of commissions on sales about to be consummated by reason of plaintiff's negotiations then in process. The plaintiff was employed to render continuous service as defendant's broker for the sale of frozen fish for a 5% commission. The plaintiff had approached some large prospective customers, without yet consummating a sale; but the market demand was such that the defendant felt assured that it could obtain this business without employing a broker. It, therefore, gave notice that no commission would be paid on sales to these specified customers. Large sales to them were soon thereafter effected by the defendant.

Minn. -This section is cited in Olson v. Penkert, 252 Minn. 334, 90 N.W.2d 193 (1958) , holding that although a broker may be entitled to a commission if the broker's authority is revoked by the owner in bad faith in order to avoid paying, there is no entitlement to a commission if the sale fails of consummation because a dispute over the commission engendered by the broker.

Mont. - Associated Agency of Bozeman v. Pasha, 191 Mont. 407, 625 P.2d 38 (1981) .

N.J. -In McCue v. Deppert, 21 N.J.Super. 591, 91 A.2d 503 (1952) , property had been ''listed'' with plaintiff broker for sale at $30,000, commission 5 per cent. Defendant was shown the property by plaintiff. The defendant thereupon sought out the owner and bought the property for $25,000, expressly warranting that no broker was involved. The broker was held to have a remedy in tort.

N.Y. -In Goodman v. Marcol, Inc., 261 N.Y. 188, 184 N.E. 755, 88 A.L.R. 714 (1933) , the dismissal of the agent was to avoid paying the commission, and the land was at once sold through another agent. The court said: ''The evidence here is not only sufficient; it strongly impels to the conclusion that the plaintiff was acting within a reasonable time when he submitted the last offer received of $177,500; that his labor to procure the stipulated price of $180,000 was about to prove successful; that he was dismissed from his employment by the defendant, not because a reasonable time had elapsed, but solely that the defendant might save itself from the payment of the customary commissions... We think that questions of fact arose which required a submission of the case to the jury.''

In Sibbald v. Bethlehem Iron Co., 83 N.Y. 378 (1881) , the court said: ''Where no time for the continuance of the contract is fixed by its terms, either party is at liberty to terminate it at will, subject only to the ordinary requirements of good faith. Usually the broker is entitled to a fair and reasonable opportunity to perform his obligation, subject of course to the right of the seller to sell independently. But that having been granted him, the right of the principal to terminate his authority is absolute and unrestricted, except only that he may not do it in bad faith, and as a mere device to escape the payment of the broker's commissions.''

Okl. -In Harris v. Conway, 343 P.2d 1069 (Okl.1959) , the owner sold the property to her son after she knew or had reason to know that the broker had found a ready and willing purchaser. See also Oro Verde Groves, Inc. v. Fuchs, 136 So.2d 12 (Fla.App.1962) ; Air Conditioning v. Harrison-Wilson-Pearson, 250 S.W.2d 274 (Tex.Civ.App.1952) , rev'd, 151 Tex. 635, 253 S.W.2d 422 . It is not made clear why the power of the broker had not lapsed by reason of the express time limit set in the original ''listing.''

Ore. - Taylor v. Gaudry, 46 Or.App. 235, 611 P.2d 336 (1980) ; Red Carpet Real Estate of Aloha, Inc. v. Huygens, 270 Or. 860, 530 P.2d 46 (1974) .

(n28)Footnote 28. In Mercantile Trust Co. v. Lamar, 148 Mo.App. 353, 128 S.W. 20 (1910) , although the agent made no promise and did not sign, the court said that ''it acted under the instrument and advertised the property extensively; this made the agreement bilateral.'' The court held a revocation ineffective, if given before the end of the agreed period. See, also, Braniff v. Blair, 101 Kan. 117, 165 P. 816 (1917) .

In the case of Stensgaard v. Smith, 43 Minn. 11, 44 N.W. 669 (1890) , the defendant signed a written document containing the following language: ''In consideration of L.T. Stensgaard agreeing to act as agent for the sale of the property hereinafter mentioned, I have hereby given to said L.T. Stensgaard the exclusive sale, for three months from date... I further agree to pay said L.T. Stensgaard a commission of two and one-half per cent on the first $2,000, and two and one-half per cent on the balance of the purchase price, for his services rendered in selling [the property].'' Stensgaard himself did not sign this document, and in his complaint it was not alleged that he made the promise ''to act as agent'' that was the stated consideration for the owner's giving him ''the exclusive sale.'' Probably such a promise should be implied in fact. Stensgaard at once posted notices on the land, published advertisements, and solicited purchasers. One month later, the defendant sold the property himself, and the agent sued for damages. The court held that there was no binding contract, for lack of consideration. The owner's promise of a commission was ''for his services in selling'', and no sale by plaintiff was ever made. Until such a sale, the court thought the offered promise of a commission to be revocable. For cases contra see note 23. The case is disapproved in Braniff v. Blair, 101 Kan. 117, 165 P. 816 (1917) .

(n29)Footnote 29. Although this Section does not deal with the extent of the broker's power to bind the principal, or with interpretation of the broker's written authority, the case of Solana Land Co. v. National Realty Co., 77 Ariz. 18, 266 P.2d 739, 43 A.L.R.2d 1002 (1954) is of interest. The owner signed a standard ''listing contract'' with the broker, reading: ''In consideration of your agreement to list in your office and of your efforts to find a purchaser for the same you are hereby authorized to sell (and are given the exclusive right to sell) ...''. The terms of sale were then stated in full. The broker interpreted this as giving him power to bind his principal by contract with the buyer; but the court held otherwise and denied the purchaser a decree for specific performance. Observe that the broker was a real estate broker, not a stock broker and also that the word ''listing'' was used.

See Bernstein v. Yee Wong, 236 F.Supp. 5 (D.D.C.1964) where the undisclosed purchaser of realty procured under an exclusive listing sought specific performance after seller refused to accept purchaser's acceptance. It was held that the exclusive broker could not bind seller to complete sale to any particular purchaser. The question of seller's liability for the commission was not before the court.

(n30)Footnote 30.

Kan. - Isern v. Gordon, 127 Kan. 296, 273 P. 435, 64 A.L.R. 391 (1929) .

N.Y. - Thoens v. Kennedy Realty Corp., 279 App.Div. 216, 108 N.Y.S.2d 882 (1951) , aff'd, 304 N.Y. 753, 108 N.E.2d 616 , commission not due unless broker shows buyer's assent. Query, as to prevention by defendant and lack of good faith.

Tex. - Sunshine v. Manos, 496 S.W.2d 195 (Civ.App.1973) .

Eng. -Trollope v. Caplan, [1936] 2 K.B. 382 (C.A.). A broker who fails to produce a buyer on the terms specified has no right to the commission. If the broker asserts that the production of such a buyer was prevented by collusion between the owner and a second broker, the broker must affirmatively prove it. In re Fox' Will, 126 N.Y.S.2d 158 (Sur.1953) .

This section is cited in Harding v. Rock, 60 Wash.2d 292, 373 P.2d 784 (1962) , and the analysis made herein is followed in some detail. The defendant listed his property with the plaintiff broker, with the right of exclusive sale until September 26, 1958, promising to pay a 5% commission if a sale should be consummated within 190 days after expiration of the listing with any one with whom the plaintiff had negotiated. The plaintiff produced a purchaser who offered to buy on stated terms, on the express condition that he should be granted a specified ''soil bank'' contract by the Government. The defendant accepted this offer. The purchaser applied for the ''soil bank'' contract, but nothing further was done with respect to it. After about 3 months, the defendant sold the property to a third party with whom the plaintiff had not negotiated. The plaintiff sued for the 5% commission. The plaintiff's purchaser had steadily refused to complete the purchase without fulfillment of the condition, the obtaining of the ''soil bank'' contract. The court held that the defendant's action in selling without notifying the plaintiff and giving him the chance to fulfil the condition was a breach of his promise to the plaintiff, for which the latter was entitled to damages. The defendant's promise to pay the commission was an offer of a unilateral contract, to be accepted only by consummating a sale (and not merely producing a valid contract to sell); but this offer had become irrevocable by the very substantial part performance of the plaintiff. The court cited Restatement, Contracts, § 45. However, the plaintiff had no right to the 5% commission without showing that the condition of the purchaser's contract to complete the purchase (the ''soil bank'' contract from the Government) would have been fulfilled except for the act of the defendant in selling to a third party. The plaintiff had offered no evidence on this point; and the case was remanded to determine whether the fulfillment of the condition was in fact prevented by the defendant. The latter asserted that the facts were such that the obtaining of the ''soil bank'' contract was an impossibility. If this is true, the plaintiff was entitled to merely nominal damages. See also § 2.29, § 768.

In Cone v. Pedersen, 131 Conn. 374, 40 A.2d 274 (1944) , the broker was given a right of ''exclusive sale'' for 60 days. The owner's revocation, after substantial action by the broker, was held to be a breach of contract; but the broker was denied damages because he failed to show that he could have found a purchaser.

(n31)Footnote 31. In Steele v. Seth, 211 Md. 323, 127 A.2d 388 (1956) , a broker was held entitled to his commission even though the owner had revoked his authority before any agreement with the buyer had been consummated. But the broker was held to have been the ''procuring cause'' of the sale that was consummated by the owner after the revocation. The broker had obtained a down payment; and he was prevented from participating in final negotiations by his discharge and the employment of another broker.

In Galbraith v. Johnston, 92 Ariz. 77, 373 P.2d 587 (1962) , the defendant listed his property with the plaintiff broker for sale on stated terms, for an indefinite period ''until cancelled in writing.'' The listing was ''non-exclusive'', and the property was listed with other brokers. The printed-form contract expressly promised a 5% commission for making a sale ''or if sold within one year after the expiration of this listing to anyone with whom you had negotiation prior to expiration.'' The plaintiff advertised the property and had promising negotiations with Kenworthy. Six weeks after the date of the listing, the defendant gave written notice to the plaintiff and other brokers that the property was taken ''off the market.'' One month thereafter, the defendant authorized another broker (Paterno) to sell the property, promising to pay him a commission of 5%; and within another month, through Paterno's efforts, the defendant contracted to sell the property to Kenworthy. On these facts, the court held that it was error for the trial court to hold that the plaintiff could not establish a right to the commission without proving that he was the ''producing cause'' of the sale. The jury had found that Paterno and not Galbraith was the producing cause. Observe, that the defendant had in express terms promised the commission if the property was sold to [Kenworthy] within one year after the end of the listing period. The printed promissory words are not ''ambiguous'' to anybody; and the defendant offered no evidence as to their interpretation. Here, the defendant's offered promise had become irrevocable because it had become a unilateral contract; the plaintiff had rendered the full performance necessary to earn the commission. An actual sale to [Kenworthy] was an express ''condition precedent'' to the plaintiff's right to a commission; but it was not a part of the agreed ''consideration'' for that commission. Observe further, that the court did not render judgment against the defendant; it merely reversed and remanded to the trial court. On the new trial, it would be open to the defendant to show that the promissory words quoted above were not deleted, purely by mistake. The printed form was one prepared for use in an ''exclusive'' agency. To make it suitable in this case, various other provisions had been crossed out. But if the promise was intentionally left in, it was a binding promise.

(n32)Footnote 32. If the promise to pay commission was clearly conditional on the consummation of performance by a fixed time, the agent's power ceases at that time in spite of his rendition of substantial part performance theretofore. See Zeimer v. Antisell, 75 Cal. 509, 17 P. 642 (1888) .

The same is true where the limitation was a reasonable time which expires before consummation of the required performance. Livezy v. Miller, 61 Md. 336 (1883) ; Cadigan v. Crabtree, 186 Mass. 7, 70 N.E. 1033 (1904) ; Sibbald v. Bethlehem Iron Co., 83 N.Y. 378, 38 Am.Rep. 441 (1881) .

The power of the broker may be extended by the principal's mere assent. Baker v. Curtis, 105 Cal.App.2d 663, 234 P.2d 153 (1951) ; Pyles v. Cole, 34 Tenn.App. 601, 241 S.W.2d 841 (1951) .

Restatement (Second) of Agency, § 454, reads thus: ''An agent to whom the principal has made a revocable offer of compensation if he accomplishes a specified result is entitled to the promised amount if the principal in order to avoid payment of it, revokes the offer and thereafter the result is accomplished as a result of the agent's prior efforts.

The very similar language of the first Restatement of Agency is quoted and applied in Tahir Erk v. Glenn L. Martin Co., 116 F.2d 865 (4th Cir.1941) , and Potomac Chem. Co. v. Chapman, 146 F.2d 664 (1944) , cert. denied, 324 U.S. 881 (1945) . It is quoted and rightly distinguished in Ullmann v. May, 147 Ohio St. 468, 72 N.E.2d 63 (1947) , and Wood v. Hutchinson Coal Co., 85 F.Supp. 1010 (N.D.W.Va.1949) .

In Landow-Luzier Co. v. Grey, 34 Misc.2d 1061, 232 N.Y.S.2d 247 (1962) , defendant was alleged to have acted in bad faith in acquiring the property through another broker in order to profit by plaintiff's efforts without paying for them. The court cited Williams & Co., Inc. v. Collins, Tuttle & Co., 6 A.D.2d 302, 176 N.Y.S.2d 99 (1958) , appeal denied, 6 A.D.2d 1006, 178 N.Y.S.2d 212 . The court there had said that'' for a broker to state a cause of action sufficient to avoid dismissal, he is not required to establish that he would inevitably have been successful but for the wrongful acts of the defendant. ''See also § 571.

In Sandler v. Denston, 183 A.2d 392 (D.C.1962) , the plaintiff broker had an ''exclusive listing'' of the defendant's property for 90 days, at the price of $13,000. In disregard of this, the defendant sold the property through another broker. The plaintiff had already'' sought purchasers and showed the property to at least three interested persons. We have held previously that when a broker uses reasonable efforts to locate a purchaser, this constitutes consideration to effect a mutual contract. ''The court gave judgment for 5% of $13,000, the defendant not having shown that the property was sold for less (or any other facts in mitigation of damages). It is not stated that the broker made any promise. If he did, the promise was the consideration, and if he did not, the broker's ''reasonable efforts'' to effect a sale were sufficient to make the ''exclusive listing'' an irrevocable offer to a unilateral contract.

(n33)Footnote 33. See Mansfield v. Smith, 88 Wis.2d 575, 277 N.W.2d 740, 12 A.L.R.4th 1069 (1979) . A liquidated damages clause drafted by broker allowed for zero dollars under the facts. In the absence of this clause, the broker would have been entitled to $15,000.

(n34)Footnote 34. Associated Agency of Bozeman, Inc. v. Pasha, 191 Mont. 407, 625 P.2d 38 (1981) .

(n35)Footnote 35. 50 N.J. 528, 236 A.2d 843, 30 A.L.R.3d 1370 (1967) .

(n36)Footnote 36. 50 N.J. at 547, 236 A.2d at 853 .

(n37)Footnote 37. Followed in Donellan v. Rocks, 22 Cal. App. 3d 925, 99 Cal.Rptr. 692 (1972), where, however, the buyer had retained the broker. Also in Clark v. Wright, 699 S.W.2d 174 (Tenn. App.1985). Rejected in Professional Realty v. Bender, 216 Va. 737, 222 S.E.2d 810 (1976).

(n38)Footnote 38.

U.S. - In re L.D. Patella Constr. Corp., 23 Collier 2d 315, 114 B.R. 53 (D.N.J.1990) .

Conn. - Potter v. Ridge Realty Co., 28 Conn.Sup. 304, 259 A.2d 758 (1969) . It was held that it was the broker's burden to show that the purchaser was financially able to perform.

Idaho - Strout Realty, Inc. v. Milhous, 107 Idaho 330, 689 P.2d 222 (1984) . In dictum, the court adopts the rule that, until closing, the broker must shoulder the risk of the buyer's ability to perform. Once, however, an installment land sale contract is entered into, the risk is solely the seller's.

Iowa - Mullenger v. Clause, 178 N.W.2d 420 (Iowa 1970) . The contract was conditioned on buyer's obtaining financing, which the buyer was unable to get. Under any view of the matter, the broker had not rendered the performance of finding a willing and able buyer.

Kans.- Winkelman v. Allen, 214 Kan. 22, 519 P.2d 1377 (1974) , adopting in dictum the entire quotation from Ellsworth Dobbs in the text. The holding is merely that the broker cannot establish a claim to a commission without proving the financial ability of the prospective purchaser. It is not enough to show that the purchaser's father would gratuitously pledge his credit on behalf of his son.

Mass. - Tristram's Landing, Inc. v. Wait, 367 Mass. 622, 327 N.E.2d 727 (1975) . The court construed the broker's contract rights to a commission to be conditional on the sale of the property. Nevertheless, it stated:'' We believe, however, that it is both appropriate and necessary at this time to clarify the law, and, we now join the growing minority of states who have adopted the rule of Ellsworth Dobbs, Inc. v. Johnson... '' 327 N.E.2d at 730 . It was subsequently held that a broker does not earn a commission if the seller refuses to enter into a binding contract with the buyer who has agreed to meet the seller's terms. Capezzuto v. John Hancock Mut. Life Ins. Co., 394 Mass. 399, 476 N.E.2d 188 (1985) . This seems an unwarranted extension of the protection given to sellers under the Ellsworth Dobbs rule.

Neb. - Cornett v. Nathan, 196 Neb. 277, 242 N.W.2d 855 (1976) . Buyer defaulted because of financial inability; commission was not earned.

N.Dak.- Goetz v. Anderson, 274 N.W.2d 175 (N.D.1978) . Entry into a contract of sale does not estop the vendor from challenging the broker on the question of the financial ability of the buyer to complete the purchase.

Or. - Brown v. Grimm, 258 Or. 55, 481 P.2d 63 (1971) . The broker could not recover where the trial record shows no evidence of the buyer's financial ability to make the purchase.

Vt. - Osler v. Landis, 138 Vt. 353, 415 A.2d 1316 (1980) ; Staab v. Messier, 128 Vt. 380, 264 A.2d 790 (1970) . The broker has the burden of showing the buyer's financial ability, successfully met in the first case but not the second.

Eng. -Lord Denning's opinion in Dennis Reed, Ltd. v. Goody, [1950] 2 K.B. 277, 1 All E.R. 919 (1950), was very influential in the reasoning of the Ellsworth Dobbs Court.

See Annot., Modern View as to Right of Real Estate Broker to Recover Commission from Seller-Principal where Buyer Defaults Under Valid Contract of Sale, 12 A.L.R.4th 1083.

Strangely enough, defendant vendors who had refused to sell to willing and able buyers have invited the court to apply Ellsworth Dobbs, obviously misunderstanding its thrust. Bennett v. McCabe, 808 F.2d 178 (1st Cir.1987) ; Drake v. Hosley, 713 P.2d 1203 (Alaska 1986) ; Drake v. Conkling, 129 N.H. 660, 531 A.2d 333 (1987) .

(n39)Footnote 39. This conclusion was resisted in Dixon v. Betten, 2 Ill.App.3d 708, 277 N.E.2d 355 (1971) . The court stated that the broker had exerted no efforts. It might logically have found a bilateral contract that was cancelled for material breach. See Mark Realty, Inc. v. Rogness, 418 So.2d 373, 375 (Fla.App.1982) , where the court characterizes the contracts as bilateral and remands for a finding whether they had been materially breached by the broker, justifying the owner's actions of selling the properties without liability to the broker.

(n40)Footnote 40.

Ala. - Conway v. Matthews, 37 Ala.App. 513, 70 So.2d 827 (1954) , the broker had no right to a commission where his production of a purchaser was after the owner had himself consummated the sale.

Colo. - Lambert v. Haskins, 128 Colo. 433, 263 P.2d 433 (1953) , ''sole and exclusive agent'' to sell property on stated terms for a commission, for two months, owner had privilege of selling during that time.

Mass. - Bradley v. Donahue, 343 Mass. 774, 178 N.E.2d 871 (1961) , independent sale by owner, broker no right to commission.

N.Y. - Levy v. Isaacs, 285 A.D. 1170, 140 N.Y.S.2d 519 (1955) , mot. to resettle denied, 286 App.Div. 855, 143 N.Y.S.2d 642 , exclusive agency to sell; but no right to a commission or to damages if the owner himself effected a sale without the broker's aid.

Tex. - Baker v. Skipworth, 244 S.W.2d 299 (Tex.Civ.App.1951) , exclusive agency but not ''exclusive right to sell.''

Eng. -Prickett v. Badger, 1 C.B. (N.S.) 296.

In Ballard v. Tingue Mills, 128 F.Supp. 683 (D.Conn.1954) , the court said: ''Here the plaintiff's agency to procure Government contracts was an exclusive agency. There is utterly nothing in the facts to justify the inference that the defendant delegated to the plaintiff an exclusive right or power to secure Government contracts. By granting an exclusive agency the defendant promised only that in securing Government contracts the plaintiff should be free from competitive endeavor by other agents of the defendant: the defendant was not itself precluded from competing with the plaintiff for the achievement of that objective.''

In Hammond v. C.I.T. Financial Corp., 203 F.2d 705 (2d Cir.1953) the contract between broker and owner was found to be bilateral, the owner expressly promising exclusive sale to the broker impliedly promising to work intensively and to handle the matter with the utmost discretion.

In Shorten v. Mueller, 206 Okl. 62, 241 P.2d 187 (1952) , an owner listed his property with an agent for a specified period and promised to pay a commission if the property should be sold, within three months after expiration of the period of listing to any buyer with whom the broker had negotiated. The owner was privileged to sell to any other buyer, or to sell to the broker's prospect after the expiration of three months unless the delay was ''in bad faith.''

(n41)Footnote 41.

Tex. -In McDonald v. Davis, 389 S.W.2d 494 (Tex.Civ.App.1965) , the owner withdrew the property from an exclusive sale agency before the expiration of the sale period. There was no evidence of a subsequent sale. A directed verdict for the owner was reversed, the court remanding for trial on the issue of the plaintiff's damages, which prima facie were the amount of the agreed upon commission.

Wash. - Seattle Investment Co. v. Kilburn, 5 Wash.App. 137, 485 P.2d 1005 (1971) . The Kilburns gave Seattle an exclusive listing, but then revoked it. They asked the court to rule Seattle's recovery could only be in quantum meruit, apparently thinking that Seattle had done nothing of value. The court gave damages based on the broker's expectancy interest, citing this section for the proposition that the Kilburns could withdraw Seattle's authority to sell, but could not revoke the ''offer'' as the exclusive listing was a bilateral contract.

(n42)Footnote 42.

Cal. - Edens v. Stoddard, 126 Cal.App.2d 56, 271 P.2d 610 (1954) , printed words giving him the ''exclusive sale'' had been stricken out by the owner before signing; Harcourt v. Stockton Food Products, 113 Cal.App.2d 901, 249 P.2d 30 (1952) , an ''exclusive agency,'' the principal held to have privilege of selling his goods direct to buyers.

Del. - Matas v. Green, 53 Del. 473, 171 A.2d 916 (1961) , several brokers were authorized to offer defendant's property for sale, owner remained privileged to sell.

Fla. - Nicholas v. Bursley, 119 So.2d 722, 88 A.L.R.2d 929 (Fla.App.1960) , an ''exclusive agency to sell'' not an ''exclusive right to sell.''

Eng. - Simpson v. Lamb, 17 C.B. 603 (1856) ; Bentall, H. & B. v. Vicary [1931] 1 K.B. 253 .

In Neece v. A.A.A. Realty Co., 159 Tex. 403, 322 S.W.2d 597 (1959) , the issue was whether an agency contract, signed by the owner, created an ''exclusive agency'' or a mere ''open'' agency. The contract (a printed form) had two printed headings: ''Open Listing Agreement'' and ''Exclusive Listing Agreement.'' The first of these two headings was stricken out. The owner had sold the property, through another agent, to a person who had never been listed by the plaintiff even as a ''prospect.'' It was held by a divided court that the jury was justified in finding that the owner reasonably understood the words of the contract as creating a mere nonexclusive agency. The court's discussion (and that of the dissenters) deals chiefly with ''interpretation'' and ''ambiguity.'' This case is discussed herein under § 542.

A shipbroker negotiated a charter-party for a specified period, being promised a commission of 21/2 per cent on hire paid and earned under it. The court held that the owner was privileged to sell the ship during that period and was not bound to pay a commission after such sale. French & Co. v. Leeston Shipping Co., [1922] 1 A.C. 451.

(n43)Footnote 43.

U.S. - Arthur H. Richland Co. v. Harper, 302 F.2d 324 (5th Cir.1962) , broker's right to a commission was dependent on whether he was given an ''exclusive right to sell'' or a ''mere exclusive agency to sell.''

Ind. - Brown v. Maris, 128 Ind.App. 671, 150 N.E.2d 760 (1958) , ''the exclusive right to sell'' land for a period of 7 months, with promise of commission of 5% if during that time the land should be sold ''through you or otherwise.''

Iowa -A contrarian position was taken in Stromberg v. Crowl, 257 Iowa 348, 132 N.W.2d 462 (1965) where the court held that ''an exclusive right to sell'' contract impliedly reserves to the owner a right to sell the property without paying a commission therefor.

Mass. - Des Rivieres v. Sullivan, 247 Mass. 443, 142 N.E. 111 (1924) , ''exclusive agency'' only. Cf. Bartlett v. Keith, 325 Mass. 265, 90 N.E.2d 308 (1950) .

Mich. - Ladd v. Teichman, 359 Mich. 587, 103 N.W.2d 338 (1960) .

Mo. - South Side Realty Co. v. Hamblin, 387 S.W.2d 224 (Mo.App.1964) . An exclusive right to sell contract was treated as a bilateral contract because it was made as part of a prior sale by broker to seller of the land in question and because the court found an implied promise by broker to make efforts to sell the lots. Exclusive right to sell was taken to mean that broker receives a commission no matter who makes the sale.

Ohio - Bell v. Dimmerling, 149 Ohio St. 165, 78 N.E.2d 49 (1948) .

R.I. - DeFelice Realtors, Inc. v. Delfino, 504 A.2d 1007 (R.I.1986) . Connors v. Dagiel, 88 R.I. 113, 143 A.2d 297 (1958) , ''Exclusive Right To Sell'' the defendants''property for $11,800 and that he should have a right to a commission if the property should be sold by the defendants or by any person other than the plaintiff, owner's sale for $11,000 was not a breach.

Tex. - Ferree v. De Ely, 265 S.W.2d 860 (Tex.Civ.App.1954) , the broker was given an ''exclusive agency'', but the owner remained legally privileged to make his own sale.

Cf. Roberts v. Harrington, 168 Wis. 217, 169 N.W. 603, 10 A.L.R. 810 (1918) .

In Cone v. Pedersen, 131 Conn. 374, 40 A.2d 274 (1944) , the owner gave to the broker ''the sole and exclusive right to sell for the period of 60 days'' and promised to pay a commission of 71/2 per cent in case of a sale made by the agent, the owner, or any third person during that period. The owner's notice of revocation was held to be wrongful; but no damages were awarded because the broker failed to show that he could have found a purchaser.

In Harris v. McPherson, 97 Conn. 164, 115 A. 723, 24 A.L.R. 1530 (1922) , the owner signed the following document: ''This is to certify that on this date I have given to M.S. Harris the exclusive sale of my property ... for the sum of $8,000, and do agree to pay the said M.S. Harris 5% of the purchase price at transfer of deed.'' The owner sold the property within a few days and notified the agent, after the latter had already rendered substantial services. The court held that by giving ''exclusive sale'' the owner promised not to make a sale himself, and that the efforts of the agent to find a purchaser constituted a sufficient acceptance, binding the owner not to revoke for a reasonable time.

In Stewart-Warner Corp. v. Remco, 205 F.2d 583 (7th Cir.1953) , a distributor of radio sets was given exclusive rights of sale within a stated territory except under ''special circumstances.'' A closing-out sale of obsolete sets by the manufacturer for resale to ''premium'' houses other than regular dealers was held to be no breach.

In Mattingly v. Bohn, 84 Ariz. 369, 329 P.2d 1095 (1958) , a contract granting an ''exclusive'' agency was broken by the owner's making a sale through another agent. The court held that it was not error to award damages measured by the amount of the agreed commission even though the plaintiff broker had actually produced no purchaser. Sale through another agent had prevented the fulfillment of the condition precedent. Apparently, no question was raised on appeal as to the plaintiff's ability to produce a purchaser within the time limited or as to whether the production of such a purchaser would have involved expense that has been avoided.

In Potts v. Thompson, 61 N.J.Super. 424, 161 A.2d 284 (1960) , an owner who had authorized a broker to find a purchaser on stated terms was also legally privileged to negotiate a sale himself on such terms as he wished. Immediately after the owner had made an oral contract to sell the property and before it was reduced to writing, the broker produced a purchaser on the stated terms. The broker was held not entitled to a commission. The owner's oral contract was not void; and the broker, a third party, had no right that the owner should repudiate his contract even though the statute would have been a good defense if he had done so. See notes on this case under § 275; § 289; § 498.

That a real estate broker can maintain suit as third party beneficiary of a promise made by the vendor to the purchaser to pay the broker's commission (assuming that all conditions precedent are fulfilled), see § 818 and citations therein.

(n44)Footnote 44.

Pa. - United Mercantile Agencies v. Slotsky, 107 Pa.Super. 467, 164 A. 349 (1933) , probably an unusual case.

(n45)Footnote 45. Fortune v. National Cash Register Co., 373 Mass. 96, 364 N.E.2d 1251 (1977) .

(n46)Footnote 46. 126 Cal.App.2d 505, 272 P.2d 552 (1954) .

(n47)Footnote 47. In Flynn v. McGinty, 61 So.2d 318 (Fla.1952) , the defendant gave to a broker the ''exclusive right to sell'' and promised to pay a commission in case a sale should be made by the broker or otherwise. The writing began, ''In consideration of your endeavor to procure a purchaser.'' The broker inserted an advertisement costing $2; but it was not seen. The next day the defendant made his own sale. The court held that the broker gave sufficient consideration and had a right to the commission.

In harmony with Flynn v. McGinty, supra , see Brown v. Maris, 128 Ind.App. 671, 150 N.E.2d 760 (1958) , following Singleton v. O'Blenis, 125 Ind. 151, 25 N.E. 154 (1890) .

(n48)Footnote 48. See Moss v. Warns, 245 Wis. 587, 15 N.W.2d 786, 156 A.L.R. 598 (1944) .

In Bonn v. Summers, 249 N.C. 357, 106 S.E.2d 470 (1959) , the defendant, in writing, gave to the plaintiff an exclusive right to sell certain land on stated terms, ''for a period of three months from date of the agreement and thereafter until the agreement should be revoked by ten days notice in writing.'' About four months later the plaintiff produced a purchaser able and willing to purchase on the specified terms. The defendant refused to sell. The court held that the plaintiff had a right to the promised commission. No notice of revocation had been given, and the broker's power of acceptance continued. The purchaser offered cash in full on delivery of deed, instead of part cash and part on mortgage, the original terms; but the defendant's refusal to sell was not for that reason. Cf. Sterk & Vogel v. Kuzee, infra n. 49.

Kaufmann v. Nilan, 207 Cal.App.2d 1, 24 Cal.Rptr. 225 (1962) . The owner refused to convey to the purchaser procured by the agent merely because she had ''changed her mind,'' with no reference to any variation between the purchaser's offer and the owner's authorization to the broker. The supposed ''variation'' might have justified the owner's refusal to accept the purchaser's ''offer''; but the broker's work was so nearly completed that the owner's flat refusal to sell should be regarded as an unjustified prevention of the broker's completion of the performance necessary to earn the promised commission.

(n49)Footnote 49.

Ala. - Ar-Con Bldg. Specialties, Inc. v. Famco, 480 F.2d 162 (5th Cir.1973) . Plaintiff was defendant's exclusive agent in certain counties. Plaintiff produced a buyer for defendant's products who agreed to buy, contingent on approval of its architect. The architect required a bond that seller was unable to get. A directed verdict for the plaintiff was reversed.

Ariz. - Bishop v. Norell, 88 Ariz. 148, 353 P.2d 1022 (1960) . In Diamond v. Haydis, 88 Ariz. 326, 356 P.2d 643 (1960) , the defendant listed property with the plaintiff broker for sale on specified terms for cash. The broker produced a purchaser ready and willing to pay part cash and part by a note to be discounted by a third party. The defendant and the purchaser executed a ''Purchase Contract and Receipt'' in which the defendant agreed to convey the property on these terms, but expressly conditional on the third party's discounting the purchaser's note by assignment from the defendant ''without recourse.'' This condition was never fulfilled, since the third party required the defendant's regular indorsement. The defendant refused to convey. The court held that the broker was not entitled to the commission, saying that ''no binding contract was ever consummated between the purchasers and the sellers.'' The decision is correct, even though the ''Purchase Contract and Receipt'' was exactly what it purported to be-a binding contract. It was merely a contract by which the seller was conditionally bound, the condition being the discount by the third person of the purchaser's note to the seller indorsed ''without recourse.'' But this contract of purchase and sale, irrevocable though it was, was not a contract on the execution of which the broker was entitled to his commission. After signing the ''Purchase Contract'', no party thereto had any power of revocation and no party's assent would have been necessary to enforcement. What was necessary was the third party's payment of cash for the note, assigned to him ''without recourse.'' Had this condition been fulfilled, the condition of the broker's right to the commission would also have been fulfilled. On the facts existing, neither condition was fulfilled. The case is consistent with the Ellsworth Dobbs doctrine discussed at notes 35-38 above.

Cal. -In Williams v. United California Bank, 223 Cal.App.2d 309, 35 Cal.Rptr. 788 (1963) , the plaintiff broker negotiated a lease of property in which the lessor gave to the lessee an option to buy for $500 per acre cash. The broker received no commission, but both in a written contract with the broker and in the lease with option the lessor promised to pay the broker a commission of 6% ''in the event the option is exercised hereunder.'' The lease and option were assigned to Island Farms. The defendant bank, representing the estate of one of the lessors tried in good faith to induce Island Farms to exercise the option and failed. Later, the property was sold to Island Farms for $350 per acre on terms. The court held that the broker had no right to a commission, the express condition precedent not having occurred.

Ill. - Nardi, Pain & Podolsky, Inc. v. Vignola Furniture Co., 80 Ill.App.2d 220, 224 N.E.2d 649 (1967) . The purchaser's written offer omitted an oral condition subjecting contract to seller's obtaining a mortgage for the acquisition of new property.

Mich. -In Sterk & Vogel v. Kuzee, 334 Mich. 249, 54 N.W.2d 219 (1952) , it was held that the broker had not earned a commission by producing a buyer willing to pay cash, when the terms of sale specified by the owner provided for a definite credit period with interest. The element of profitable investment is material. Cf. Bonn v. Summers, supra n. 48 .

N.H. - Bell v. Warren Development Corp., 114 N.H. 267, 319 A.2d 299 (1974) .

Va. -In Rotella v. Lange, 202 Va. 575, 118 S.E.2d 516 (1961) , the defendant listed a restaurant business with plaintiff, promising to pay a commission of 10% if plaintiff found a purchaser at $9,000 cash. The plaintiff produced a buyer at $9,000 cash, conditional on the buyer's obtaining an A.B.C. license, a health permit, and a 5-year lease on the building. The defendant rejected the offer, giving no reason. The court held that the broker was not entitled to a commission.