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Goodson v. Ancient Accepted Scottish Rite

A-4928-02T1 (N.J. Super. App. Div. 2005) (Unpublished)

CONTRACTS; BROKERS —An oral real estate sales contract is not enforceable if important terms have not been agreed upon, such as the broker’s commission.

A man entered into a contract with a real estate broker under which he agreed to use the broker as his exclusive representative to purchase property. The contract provided that the man would pay the broker a six percent commission for his services. Soon thereafter, the man, through his broker, made an offer to purchase land owned by a corporation. The corporation rejected the offer. Nine months later, the corporation signed an exclusive listing agreement with a different real estate broker, whereby the corporation agreed to pay the broker an eight percent commission to represent it in the sale of its land. A couple of months later, the man, through his broker, again made an offer to purchase the corporation’s land. Prior to making this offer, the broker assured the man that he would not be responsible for the commission owed to the corporation’s broker because he had made an offer for the land prior to the corporation entering into the listing agreement with its own broker. Upon receiving the renewed offer, the corporation told the man that he was not listed as an exception to the listing agreement and that he would be responsible for the payment of the broker’s commission. The man disagreed and the corporation instructed both real estate brokers to resolve the issue. The brokers were unable to reach an agreement, and as a result, the corporation never formally accepted the man’s offer to purchase the land. The corporation later entered into a contract to sell the property to a different buyer. The man then filed a complaint against the original corporation, asserting that it had breached an oral contract to sell the property and sought specific performance. The man also filed a complaint against his broker and the corporation’s broker asserting fraud and intentional and negligent interference with his oral contract with the corporation. He asserted that each of the brokers interfered with his contract by failing to reach an agreement regarding commissions. The lower court found that the corporation and the man had not entered into an enforceable contract for the land because an agreement was never reached as to the brokers’ commission. As a result, it wouldn’t order specific performance and granted summary judgment for the corporation. The court submitted the issue regarding the brokers’ liability to a jury. The jury found the man’s own broker free of negligence, but found the corporation’s broker twenty-five percent negligent. The man appealed.

The Appellate Division affirmed the lower court’s determination. On appeal, the man asserted that the lower court erred in submitting the issue of the corporation’s liability to the jury because the selling corporation had been dismissed from the case through summary judgment. As a result, the man contended that he was entitled to a new trial. The Court found that the lower court had erred in permitting the jury to apportion negligence against the selling corporation since it had been dismissed from the case, but that the appropriate remedy was not a new trial. It held that the lower court should have instead molded the verdict against the brokers, who were the remaining culpable parties. It found that the lower court’s error was harmless because there was no evidence that it affected the jury’s consideration of the brokers’ negligence.


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