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Hillis v. Lake - 421 Mass. 537, 658 N.E.2d 687 (1995)

Rule:

When a broker is engaged by an owner of property to find a purchaser for it, the broker earns his commission when (a) he produces a purchaser ready, willing and able to buy on the terms fixed by the owner, (b) the purchaser enters into a binding contract with the owner to do so, and (c) the purchaser completes the transaction by closing the title in accordance with the provisions of the contract. The requirement that the sale actually be consummated, however, is subject to an exception. A broker has an enforceable claim when the first two requirements are met but the failure of completion of the contract results from the wrongful act or interference of the seller.

Facts:

The sellers entered into an agreement for the agents to serve as exclusive brokers for their property. The agents obtained a buyer, but after hazardous materials were found, the buyer's investor and its mortgagor withdrew from the project. The buyer located another investor, and the sellers also purchased an interest in the project. After the sellers could not produce certification that the contamination had been cleaned up, the sellers repurchased the property and discharged the mortgage. Plaintiff agents brought an action against defendant sellers to recover their commissions. The trial court concluded that the agents were entitled to a commission with interest and, on the finding of a violation of Mass. Gen. Law ch. 93A, an award of attorney's fees. The appeals court reversed. Thereafter, plaintiff agents appealed.

Issue:

Were plaintiff agents entitled to a commission with interest after defendant sellers were unable to certify that the land was contamination-free?

Answer:

No.

Conclusion:

On appeal, the court affirmed the appeals court's decision and reversed the judgment of the trial court. The court held that the conditions for payment of a broker's commission were not met because no closing occurred. The court concluded that the sellers' inability to certify that the land was contamination-free did not constitute a wrongful act or interference by the seller.

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