Taylor v. Ribeiro

A-3612-98T1 (N.J. Super. App. Div. 2000) (Unpublished)
  • Opinion Date: March 21, 2000

BROKERS; COMMISSIONS—If a broker resells a house after the original buyer breaches a sales contract, the commission earned on the second sale is a factor in determining damages payable by the breaching buyer.

A residential real estate contract provided for a home inspection and if that inspection revealed any defects requiring repair, the buyer had the right to terminate the contract and recover her deposit, “unless the Seller agrees, in writing, within five (5) business days of receiving the inspection results to repair and/or replace same, as may be required at the Seller’s own cost and expense.” Despite this provision, following receipt of the inspection report, the buyer decided not to purchase the unit. A provision of the contract stated that, “[i]f Buyer breaches this Contract, Buyer will nevertheless be liable to the Broker for damages as determined by the Court which may be equivalent to the broker’s fee in this Contract.” The lower court concluded that the appropriate measure of damages was the broker’s fee, but the Appellate Division was concerned that such an award might work an injustice. Apparently, the same broker produced another buyer for the property and received a full commission on that sale. “Under those circumstances, the judge should have considered the extent to which defendants were damaged by the loss of this commission in light of the receipt of a full commission for the subsequent sale of the same property. Accordingly, we remand for a plenary hearing on the extent of damages, if any, to be paid by plaintiff to these defendants.”