Tristram's Landing, Inc. v. Wait - 367 Mass. 622, 327 N.E.2d 727 (1975)

Rule:

The court adopts the following rules: 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. If the contract is not consummated because of lack of financial ability of the buyer to perform or because of any other default of his there is no right to commission against the seller. On the other hand, if the failure of completion of the contract results from the wrongful act or interference of the seller, the broker's claim is valid and must be paid.

Facts:

Plaintiffs, real estate brokers, sued defendant, property owner, to recover a brokerage commission after the buyer failed to show up at the real estate closing. The only reference made to the commission was found in the purchase and sale agreement signed by the buyer and the property owner. The property owner argued that no commission was earned because the sale was not consummated. An order for direct appellate review was issued to the Appeals Court (Massachusetts), finding that the real estate brokers were entitled to their brokerage commission from the property owner. The property owner appealed. 

Issue:

Were the real estate brokers entitled to recover a brokerage commission from the property owner? 

Answer:

No.

Conclusion:

The appellate court construed the language of the sale as providing for a special agreement or as creating special circumstances, wherein consummation of the sale became a condition precedent for the real estate owners to earn their commission. Accordingly, because the sale was not consummated, the real estate owners were not entitled to recover the amount specified in the agreement. The court went on to adopt specific requirements for when a broker is entitled to a commission under a brokerage agreement.