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Associated Business Brokers, Inc. v. Plansky

A-6696-01T2 (N.J. Super. App. Div. 2003) (Unpublished)

BROKERS; COMMISSIONS—It is for a jury to accept or reject testimony as to whether a contract-buyer is ready, willing, and able to close.

After sellers backed out of a transaction, a business broker sued them for its commission pursuant to a brokerage contract. The contract provided that the broker was entitled to a commission if it procured a buyer that was ready, willing, and able to purchase sellers’ business. The broker claimed that it provided a ready, willing, and able buyer, but the sellers changed their minds about selling the business and backed out of the deal. The buyer testified that it was planning to obtain a home equity loan on his house for the down payment and obtain a loan against his other business (or sell it) to obtain the balance of the purchase price. The lower court dismissed the broker’s claim, finding that the broker did not prove the buyer was financially able to close the deal. It found that the buyer’s ability to procure financing was wishful thinking and not sufficiently concrete to demonstrate he was financially able to buy the property. The lower court found that the buyer needed to provide tangible proof of his financial ability to purchase the business (such as bank records, an appraisal of his home, a loan commitment, etc.). The Appellate Division, in reversing, found that the broker had shown sufficient evidence to establish that the buyer was financially able to close. In deciding a motion for summary judgment, a court must weigh all reasonable inferences in favor of the non-moving party. The Court found that the buyer presented a concrete plan for obtaining the financing. The buyer testified that he was able to obtain the money to close by obtaining a home equity loan on his house, by selling his other business, or by borrowing the funds from a sibling. It is a jury’s role to determine whether to accept a buyer’s testimony that he or she is financially able to close.

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