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Investors Services, Inc. v. BNE Associates

A-2559-00T5 (N.J. Super. App. Div. 2002) (Unpublished)

BROKERS; COMMISSIONS—It is a matter of fact for a jury to decide if there was a substantial break in purchase contract negotiations such as would deny a broker its commission, even if the delay was over twenty months.

A real estate broker introduced a buyer to a property. The broker and the buyer then signed a letter agreement memorializing their understanding that if the buyer purchased that property, the broker would be recognized as the “procuring force” and would be entitled to a four percent commission. The broker gave copies of due diligence items it had researched and assembled to the buyer. A principal of buyer then told the broker that one of the buyer’s other principals had a past relationship with the seller and asked the broker to step aside. The broker then maintained limited contact with the buyer. About twenty months later, the buyer purchased the property. When the broker discovered that the buyer purchased the property from the seller, the broker demanded his commission. When the buyer refused, the broker sued. At trial, the jury determined that the broker was the procuring cause of the sale and was entitled to the commission rate set forth in the letter agreement. The buyer appealed. It claimed that since the broker had limited contact with the buyer over the twenty month period prior to the sale, there was a substantial break in the negotiations that would not entitle the broker to receive a commission. The Appellate Division agreed that it was a question for the jury to determine if there was a substantial break in the negotiations. A reasonable jury could determine, as did this one, that there was no substantial break in the negotiations and that the broker was the procuring cause of the sale. The Court also noted that the contract between the parties specified that, if the buyer bought the property, the broker would be deemed the procuring cause of the sale.


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