It may be argued that the agent has power to sign a contract because "the appointment of an agent, in general, carries with it all powers necessary, proper and usual, to effectuate the purposes of the appointment." 6 But this must be taken in connection with the further statement that " the agent may use the ordinary and appropriate means in execution of the power given to him; and they are deemed to be comprehended within the authority, although not expressed." 7 But, under the prevailing rule, a real estate broker fulfills his duty when he presents to the principal a purchaser ready, willing and able to purchase on the terms prescribed by the principal,8 or, under the rule which prevails in some jurisdictions, when he procures an enforceable contract of sale; 9 but under neither rule does it follow impliedly from the broker's authority "to sell" that he has power to sign a contract of sale for his principal without special authority to do so.
The Statute of Frauds of each state is of importance in determining whether the broker has authority to sign the contract of sale.
In those states in which the Statute of Frauds requires the contract of sale to be signed by the vendor or his duly authorized agent, thereunto authorized in writing, or where similar words are used, it would, of course, require written authority for the broker to sign the contract, and from the viewpoint of evidence, the question could be determined by his ability or inability to produce written authorization.
6Hall v. Lauderdale, 46 N. Y. 70 (1871).
8 Sec. 96, 115, 117-119 infra.
9Sec. 115, 117-119 infra.
In those states in which the Statute of Frauds requires the contract of sale to be signed by the vendor or his duly authorized agent, and the provision that the agent's authorization to sign must be in writing is omitted, questions difficult to determine frequently arise.
It is beyond the scope of this work to present the statutes of each state. The statutes of several states are, however, presented in the following sections, while the decisions in some of the other states are also referred to, although the statutes are not given.
The statutes requiring the agent's authority to negotiate a sale to be in writing 10 must not be confused with the statutes requiring written authority in the agent to sign the contract. In the former case, although the agent has written authority to sell as required by statute, the question nevertheless arises whether this written authority to sell includes authority to sign the contract.
In New York, while generally the contract of sale must be in writing, the authority of an agent to sign the contract for his principal need not be in writing. With respect to a contract, the statute 11 provides that it must be "subscribed by the grantor or by his lawfully authorized agent," while with respect to a deed it provides12 that it shall be subscribed by the grantor, "or by his lawful agent, thereunto authorized by writing." In other words, while as to deeds the agent's authority to sign for the principal must be in writing - i. e., by power of attorney or otherwise - as to contracts for the sale of real property the agent may be orally authorized to sign for the principal.13 In an early case,14 the court, after observing that the statute does not require a seal to a contract for the sale of real estate, says: "The authority of the agent (to sign the contract) may be conferred by parol; neither a written authority nor an authority under seal is required." 15
¹° Sec. l3-22 supra.
11 N. Y. Cons. Laws, Ch. 50, Sec. 259, formerly Sec. 224 of the Real Prop. Law.
¹² N. Y. Cons. Laws, Ch. 50, Sec. 242, formerly Sec. 207 of the Real Prop. Law.
It has been observed that here exists a peculiar situation with respect to a contract for the sale of real estate. The statute requires that when a person himself makes the contract for the sale of real estate it must be in writing, signed by him. When he makes the contract through an agent, the agent may sign, but the agent's authority may be given orally. What, therefore, it is said, the person himself cannot do, except in writing, he may do orally through another. But it seems that the situation is not very peculiar after all, for is not the agent acting for the principal? And when the agent signs the contract, is it not the act of the principal, performed through his agent? This being true, the peculiarity of the situation does not deserve as much attention as do the dangers, sometimes to the principal, sometimes to the agent, which attend the situation.