Sec. 113. General Statement

The broker must be the "procuring cause" of the sale. (Sec. 116-120.) Promises to pay commissions are not enforceable if there is no consideration to support them. (Sec. 121.) Unsuccessful efforts give the broker no claim against the principal. (Sec. 122, 123.) If the purchaser takes title in another person's name, the broker is not thereby deprived of commissions. (Sec. 124.)

It is not indispensable that the purchaser should be introduced to the principal by the broker, nor that the broker should be personally acquainted with the purchaser, nor that the broker be present and an active participator in the agreement, if the sale is effected through his agency. (Sec. 125-127.) Advertisements of the broker may be the inducing cause of the sale and entitle him to commissions. (Sec. 128.)

When the proposed purchaser abandons the broker, or if the broker gives up the negotiations, the owner may sell to the same purchaser induced to purchase by another, without becoming liable to the first broker for commissions. (Sec. 129.) While the principal may not take the sale into his own hands, without terminating the agency, yet where the broker abandons the negotiations, the employer may subsequently sell to the same person without liability for commissions. (Sec. 130.)

Sec. 114. Methods Of Earning Commission

"At least three different methods of earning a commission under an agency contract for the sale of real estate may be provided: First, by effecting a binding contract of sale under authority given to the agent to make such contract for the principal;1 second, by producing a purchaser to whom a sale is in fact made; third, by producing a purchaser ready, willing and able to buy on terms specified in the agency agreement."2 A real estate broker may be employed simply to find a purchaser either generally or upon certain terms, or he may be employed to procure a binding contract of sale. The latter class of cases is rare and the general duties of the broker do not require him to go so far.3 While the general obligation of the broker is to bring the buyer and seller to an agreement (that is, a meeting of the minds upon the terms), this general obligation may be varied by contingencies and broadened or narrowed by specific contract.4 A broker may, by agreement with his principal, so contract as to make his compensation depend upon a contingency which his efforts cannot control, even though it relates to the acts of his principal,5 and the broker is bound by his contract even though it be a hard one.6

Sec. 115. Obligations Of The Broker

There has been some attempt, also, to draw a very fine distinction concerning the broker's obligation. In one case,7 it was said that "The authorities recognize a distinction between the employment of a broker to find or procure a purchaser for the property of another, and the employment of a broker to effect and close a sale of such property. In the one case the broker finds the purchaser and produces him to the property owner, who negotiates and effects the sale with such purchaser; in the other case, the broker not only finds the purchaser, but negotiates the sale with him on the terms authorized by his principal, leaving nothing for the seller to do but execute the necessary transfers of the title to the property."

1 As to when the broker has authority to sign a contract, see Sec. 38-41 supra.

McDermott v. Mahoney, 115 N. W. 36 (Iowa 1908).

Platt v. Johr. 9 Ind. App. 60 (1893). 4 Parker v. Walker. 86 Tenn. 568 (1888) ; Hinds v. Henry, 36 N. J. L. 328 (1873). 5 See Sec. 230 et seq. as to agreements to wait for commissions, making commissions depend upon passing of title, etc.

6 Colonial Tr. Co. v. Pacific Co.. 158 Fed. 279 (1907). 7 Wiggins v. Wilson, 45 So. 1013 (Fla. 1908).

But in McFarland v. Lillard, 2 Ind. App. 163 (1891), it was held that there is no meritorious distinction between the case of an agent undertaking to sell and one undertaking to find a purchaser; the court saying, "The broker, in either case is required to do no more than find a purchaser. He can not do the selling, unless specially authorized to do so by power of attorney.8 That must be done by the principal. The undertaking to 'sell' in such cases is no more than an engagement to find a purchaser who is ready and willing to buy." 9

"Whether a broker is to 'introduce' a purchaser, or to 'find' or 'procure' one, or whether he is to do all these things combined, his duties remain practically the same. The words 'find,' 'procure,' 'introduce,' are generally used synonymously in the making of such contracts, and, whether used conjunctively or disjunctively, the essential thing they require the broker to do is to secure a customer who is or will become a purchaser."10

"The verb 'sell' and the noun 'sale' vary in meaning according to the different contexts in which they are used. Ordinarily a sale is an executed contract - a completed transaction binding on seller and buyer alike. In contracts creating the relationship of principal and real estate broker, however, a different meaning is generally given by construction. The broker 'sells' when he finds a purchaser ready, able and willing to buy on the terms proposed by the principal. A contract for commissions on sales entitles the broker to the specified compensation whenever, through his influence, such a prospective purchaser has been brought to the principal, though by reason of some fault or disinclination of the latter, the sale is never completed, or is consummated on terms somewhat different from those originally proposed by the principal."11

8 See the Indiana statutes as to who may make contract in that state.

9 Citing Treat v. De Celis, 41 Cal. 202; Duffy v. Hobson, 40 Cal. 240; Goss v. Broom. 31 Minn. 484; Reynolds v. Tompkins, 23 W. Va. 229; Lockwood v. Rose, 125 Ind. 588.

10 Platt v. Johr, 9 Ind. App. 60 (1893).

In Covey v. Henry, 71 Neb. 124 (1904), it was contended that there is a distinction between an agent to sell and an agent to find a buyer; that in the one case the agent has power to make the sale and bind his principal, while in the other he has not. The court said: " As between the seller and the agent this is a distinction without a difference, for in either case, if there were a valid employment, the seller would be liable to the agent for his commission if he made a sale or found a buyer. The only difference to be found in this distinction is that, in the former case, the buyer could demand performance by the seller, while in the latter case he could not."