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Rastelli v. MECA Electronics, Inc.

A-6719-97T2 (N.J. Super. App. Div. 1999) (Unpublished)

BROKERS; COMMISSIONS—In the absence of a written or oral agreement and where the seller has not been unjustly enriched, an equipment seller has no obligation to pay a commission to a broker who introduced the customer.

A company owning a piece of surplus industrial equipment faxed a document to many individuals and businesses advertising the equipment for sale. A used machinery broker received one of the faxes and, without contacting the machinery owner, began advertising the equipment for sale. A machinery dealer responded to the advertisement. The broker then first contacted the equipment owner about the equipment’s availability. It was told that the machine was available and that the “net price” was $110,000. The broker understood this to mean that “the seller will not pay a commission to a broker.” It then added 10% to the price as a commission. The ultimate equipment buyer inspected the equipment and agreed to purchase the equipment directly from the seller for $110,000. The broker then sought a 10% commission from the seller. The broker’s suit was dismissed at the summary judgment stage and the Appellate Division upheld that ruling. The lower court found that there was no contract between the broker and equipment owner. The equipment owner never agreed to protect the broker’s commission. In addition, the Court found there was no oral agreement. In fact, it found just the opposite. Further, there was no proof that in the industry a broker is entitled to a commission on a quantum meruit basis if such a sale is consummated. As to the broker’s claim for unjust enrichment, the lower court ruled that unjust enrichment would only have applied if the broker could reasonably have expected to get a commission from the seller. Here, there was no reasonable expectation that the seller would pay such a commission. In fact, the seller received only the $110,000, that it was asking. Therefore, the seller received no extra money that should have belonged to the broker. The broker also argued that there was an implied agreement by the seller that it would protect the broker’s right to a commission on the sale of the equipment. In making that argument, it relied on UCC Section 2-207(3). The Court pointed out, however, that the UCC is applicable to a “sale of goods” not to an alleged commission contract for brokerage services. In addition, the conduct of the parties did not imply the existence of such a contract.


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