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Free Books / Real Estate / American Law Of Real Estate Agency / | ![]() |
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Chapter III. Sec. 19. Nudum Pactum, A Contract To Be Effective Must Be Based Upon A Consideration |
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This section is from the book "American Law Of Real Estate Agency", by William Slee Walker. Also available from Amazon: American law of real estate agency.
A contract by a person having no interest in the transaction, to pay a commission if a sale is effected, is void, unless supported by a consideration. Smyth v. Mack, 19 N. Y. S. 347, 64 Hun, 639. Release of an existing indebtedness for commissions, due in a mutual contract for the sale of land, is a new contract and must be based on a consideration, and an oral statement by the agent that he claims no commissions is not therefore sufficient to show a release. Metcalfe v. Kent, 104 Iowa, 487, 73 N. W. 1037; McComb v. Von Ellert, 27 N. Y. S. 372, 7 Misc. R. 59. See also Sec. 788.
Where A, without any existing employment, exhibits a house to one who rents from the owner, a promise by the owner, made thereafter, to pay A for his services, is without consideration. Sharp v. Hooper (N. J. Sup. '06), 64 A. 989; Bagnole v. Madden, 69 A. 967, 76 N. J. L. 255; Wolverton v. Tuttle, 51 Ore. 501, 94 P. 961.
Where a broker was employed to effect an exchange of properties and has earned his commissions by obtaining a valid agreement therefor, an agreement subsequently made to claim no commissions, unless deeds pass or his client's title proves unmarketable, is without consideration. Moskowitz v. Hornberger, 46 N. Y. S. 462, 20 Misc. Rep. 558; Rohkohl v. Sussman, 113 N. Y. S. 586, 61 Misc. 246. See also Sec. 788.
A broker is not entitled to commissions on an exchange of properties, where he did nothing, and does not show that he was excused from rendering services. Walton v. McMorrow, 39 N. Y. App. Div. 667, 57 N. Y. S. 691. The mere insertion in an instrument that it is irrevocable, is without consideration and inoperative. Walker v. Denison, 86 I11. 162. An agreement by an agent, through misstatement, to reduce his commissions was held to be without consideration. Dayton v. Am. Steel Range Co., 73 N. Y. S. 316, 79 N. Y. S. 1130, 76 App. Div. 454, 36 Misc. R. 223. An agreement to pay an agent two and one-half per cent. on sales made by the vendor is without consideration. Wright v. Fulling, 93 N. Y. S. 228, 104 App. Div. 49. Compare Sec. 42.
A promise made under an erroneous belief to pay a commission is without consideration, no service having been rendered, and the broker is not entitled to recover. Bellesheim v. Palm, 66 N. Y. S. 273, 54 App. Div. 77.
Where defendant agreed to pay plaintiff the reasonable value of his services, and there was no agreement that such value should be fixed by defendant, at least until after the services had been performed, such a stipulation was unilateral, without consideration, and not enforceable. Walker Mfg. Co. v. Knox, 136 Fed. 334, 69 C. C. A. 160.
Where an owner of land revoked an agent's authority to sell, and told the agent that he would be taken care of as if he had made the sale, and the owner then made a sale through his own efforts, the promise to the broker was without consideration. Cronin v. American Securities Co. (Ala. Sup. '09), 50 S. 915.
Plaintiff, a broker, applied for the lowest price at which the owner of certain lots would sell the same, to which the owner's son, with authority, wrote that the price was $650, and that if plaintiff closed the deal on the lots at this figure within the next thirty days the price would stand to plaintiff, otherwise the lots were off the market. Plaintiff made no reply. Held, that such letter did not give plaintiff an exclusive right to sell the lots for the thirty days, but was a mere nudum pactum option to sell the lots for that price within thirty days. Stinemeyer v. Chase, 111 P. 57, 48 Colo. 502.
Where plaintiff and a corporation were jointly employed to bring about a sale of real estate, and the corporation contracted for a specified sum as compensation, which was paid, plaintiff could not recover of the vendor a certain commission, on the ground that it was the usual and customary commission. Jenkins v. Mohoney, 127 N. Y. Supp. 573, 142 App. Div. 653. Contra. On the other hand, entitled to commission, whether agreement for compensation was made before or after the contract for exchange. Sure v. Neuman, 133 N. Y. Sup. 776, 67 Misc. Rep. 605.
A property owner's agreement to pay real estate brokers in charge of his property as general agents extra compensation for leasing the same is void when made without consideration. Pope v. Rodena Realty Co., 144 N. Y. Sup. 1070.
Notes given by a borrower to a loan company's agent to the amount of his commission, held without consideration, and not enforceable where, because of defect in title the loan was not made. Hibbard v. Ford, 155 P. 510, - Okl. Sup. - .
Where the vendor forfeited a land contract for failure to make payments, held, that the consideration of the note given to the broker failed. Lewis v. Rayburn, 190 I11. App. 539.
The promise of an owner of land to give a broker additional compensation, held without consideration. Phillips's Ex. v. Rudy, 143 S. W. 397, 146 Ky. 780.
"Nothing remaining to be done except the formal execution of a contract for the sale of land, held that there was no consideration for a new agreement by the owner with the broker for increased compensation if he would close the contract and receive the first payment. Mayer v. Penfield, 134 N. Y. Sup. 762, 150 App. 66.
A contract by which T. was to examine and purchase timber land for M and have interest and profits, held, executed with each parcel when title vested, so that it could not be modified without consideration. Titus v. Whiteside, 228 F. 965.
Any attempted alteration, after a sale, of a contract between plaintiffs and defendant fixing the proportion in which they should divide the commission for a sale, if without consideration, would be ineffectual. Smith v. Goldsborough, 167 N. Y. Sup. 297, 179 App. Div. 769.
Provision of real estate 'exchange contract requiring one of the parties to pay a commission to the other party's broker, to whom first party was not indebted, is void for failure of consideration. Lister v. Sakeminski, 172 N. W. 397, - Mich Sup. - .
Real estate exchange contract provided, "The parties to this agreement hereby acknowledge that W. and F. (brokers of the respective parties) brought about this sale, and agree to pay the regular broker's commission therefor upon their respective properties", construed, in view of Comp. Laws 1915, sec. 11981, was merely an agreement by each party to pay his own broker, and did not entitle a broker, under sec. 12353, to recover a commission from the party by whom he was not employed, and whom he did not represent in the transaction. Id.
A broker who was the means of finding a purchaser and bringing about negotiations leading up to a sale of land was entitled to recover compensation, although he told the principal that he would not claim his commission, such statement having been made after the sale had in effect been closed and the principal not having been prejudiced or led to act differently than he would otherwise have acted by reason of such statement. Hodges v. Ramsey, 216 S. W. 568, - Mo. App. - .
 
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