Ludwig Associates, Inc. v. Clothier

A-6781-97T2 (N.J. Super. App. Div. 1999) (Unpublished)
  • Opinion Date: June 18, 1999

BROKERS; COMMISSIONS—Recission of a sales contract pursuant to its attorney review provision need not deprive the broker of any commission payable pursuant to the property’s listing agreement.

A homeowner and a real estate broker entered into an exclusive listing agreement for the sale of a residence. The agreement provided that the broker would receive an 8% commission at closing. The property was initially listed for sale at $699,000 but the listing price was reduced some five months later to $400,000. The broker produced a cash buyer for $400,000. The day after signing the contract, the homeowner expressed misgivings at the price and instructed its attorney to rescind the contract under the attorney review clause. That was done. After the expiration of the exclusive listing agreement, the property sold for $400,000 to a different buyer who was not produced by the broker. Subsequently, the broker demanded its brokerage commission under the listing agreement. The sole issue of the appeal was whether the broker was entitled to the commission under the terms of the listing agreement when the seller rescinded the contract pursuant to its attorney review clause. The Appellate Division upheld the lower court’s ruling granting the commission to the broker.