Amies v. Wesnofske

Appellate Division of the Supreme Court of New York · Contracts

ContractsBroker commissionsConditions of paymentbroker commissionclosing of titletime of paymentearned commissioncontract interpretation

Facts

The parties had an agreement providing that one-half of the plaintiffs' commission was payable on the closing of title. A dispute arose over whether that language meant the plaintiffs were entitled to that portion of the commission. The court treated the commission as having already been earned. The controversy concerned whether closing of title was a condition to liability or merely the time fixed for payment.

Issue

When an agreement states that one-half of plaintiffs' commission is payable on the closing of title, does that language make closing of title a condition to earning the commission, or does it merely designate when an already earned commission must be paid?

Rule

Where the commission has been earned, an agreement that a stated portion of the commission is payable on the closing of title refers to the time when payment must be made and does not create a condition precedent to the broker's right to the commission.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Seattle, Nora Kim signed an agreement with Harbor Vale Realty stating that the firm had earned a $12,000 commission for procuring an acceptable purchaser. The agreement added that $6,000 was payable immediately and the remaining $6,000 was payable "at closing of title." The sale contract was later abandoned, and Nora refused to pay the second half.

Under the majority rule, what is the strongest argument for Harbor Vale Realty's recovery of the unpaid $6,000?

Explanation. The controlling rule is narrow: where the commission has already been earned, contractual language providing that a stated portion is payable on closing of title refers to the time of payment, not a condition precedent to liability. Because the agreement expressly treats the commission as already earned, Harbor Vale can recover the unpaid half despite the absence of a closing. (Derived from Amies v. Wesnofske (n.d.).)