The courts are quite unanimous that the broker's commissions are not, unless expressly so agreed, dependent upon the actual closing of title or upon payment for the property sold. (Sec. 228, 229.)
After a broker's commissions are earned, his subsequent agreement to wait for payment until title is closed or until the happening of some other event, is not binding, unless supported by some real consideration. (Sec. 230.) But such an agreement is valid if made before the commission is earned (Sec. 231), and such contingent agreements are subject to the terms thereof. (Sec. 232.)
Agreements providing that commissions are to be paid at the "closing of title" are construed to mean on the day when the title was agreed to be closed, and such commissions are not defeated by the principal's inability to close the sale due to his defective title. (Sec. 233, 234.)
When land is sold on the instalment plan, the broker's commissions, unless otherwise agreed, are earned and due when the sale is made. (Sec. 235.)
Conceding that all the essentials exist which entitle the broker to his commissions,1 there remains to be determined the question, When are the commissions due? While it is impossible to formulate a rule for all occasions, the general statement may be made that commissions are due when the broker has been the procuring cause of the sale.
1 See Ch. IX supra.
As has been seen,2 the courts are not harmonious as to just when the broker may claim to be the procuring cause of a sale. In some jurisdictions the broker is not regarded to have been the procuring cause until he procures an enforceable contract of sale. Where thatrule prevails, the commissions are not due until such contract has been procured. As the broker's obligation under the usual employment does not require him to see that the contract is carried out, he may under the rule just stated, claim his commission upon the execution of the contract.3
Other jurisdictions hold to a somewhat different view as to when the broker is the procuring cause of the sale. This view, which is by far the more generally recognized, is that the broker is the procuring cause of the sale and his commissions therefore become due and payable upon the production of a purchaser, ready, willing and able to purchase upon his employer's terms. As a greater variety of questions usually present themselves under this rule than under the one first stated, the several sections immediately following are devoted to a presentation of authorities of more or less consequence dealing only with the latter, and, as has been said, more generally recognized rule.
Although there are authorities, notable mostly on account of their scarcity, which hold, in effect, that the broker is not entitled to his commission until the actual consummation of a sale by the delivery of the deed and the payment of the purchase price,4 yet under either of the rules above stated, the commissions are, of course, due when the broker produces a person who enters into an enforceable contract with the vendor.5 Where a contract of sale is executed between the employer and the purchaser, the right of the broker to his commissions does not depend upon the performance of the contract by the purchaser.6
² Sec. 117-119 supra.
3 See Sec. 229 infra.
4 See Cb. XI supra.
If from a defect in the title of the vendor, or from a refusal to consummate the contract upon the part of the purchaser or for any reason in no way attributable to the broker, the sale falls through, nevertheless the broker is entitled to his commissions for the simple reason that he has performed his contract.7