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RE/Max New Millenium v. Stevens

A-1468-01T5 (N.J. Super. App. 2002) (Unpublished)

BROKERS — Where a seller wrongfully terminates a contract and the buyer had substantially performed its obligations without breach, the seller is liable to its broker for the commission.

A residential real estate contract for sale required an initial deposit which was paid and a remaining “deposit to be paid on or before ten days after the end of the attorney review period.” The tenth day was a Saturday and Monday was a holiday. Thus, the additional deposit was due on Tuesday. Associated with the contract of sale was a listing agreement that provided that a brokerage commission was “earned when a ready, willing and able buyer ... is produced and shall be paid at the” closing. The buyer did not pay the deposit on the Tuesday it was due, but instead paid it eight days later. The seller refused the check, arguing that the late payment entitled it to terminate the contract. The lower court “found that time was not of the essence under the written contract and that the precise due date of the deposit was not a material condition of the contract.” Consequently, the lower court found substantial performance by the buyer and no material breach. As a result, the broker was entitled to its sales commission because the seller “alone was responsible for the failure to close. He was not within his rights in refusing to perform, absent a material breach, and he is liable for the commission.” The Appellate Division agreed.

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