Contract Law | The California Legal Blog

Make Sure Your Agreements Are in Writing

A recent California Court of Appeals decision once again demonstrated how important it is to always get your agreements in writing. While the decision was in the context of a real estate broker’s claim for a commission, the basic principle can be applied to all agreements.

In its decision which was issued on December 1, 2016, the California Court of Appeal reiterated the long-standing rule in California that a real estate broker’s claim for commission is not enforceable unless the agreement to pay that commission is in writing. In the case that was before the Court, the buyers told their broker friend that they were looking for a home. Being a good friend, he agreed to assist and represent them in their search for which he was to be paid a commission. Being “friends”, they did not bother to put that agreement in writing. The broker found a home for the Buyers and made two offers on their behalf. The Seller made counteroffers, at which point the Buyers then asked their attorney, also a broker, to assist them. Their attorney then made an offer on their behalf for the same property, which was accepted. When his claim for a commission was rejected, the original broker sued for his $925,000.00 commission. (more…)

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Contract Law

on December 13, 2016 at 10:56 am Leave a Comment
Tags: Agreements, Business Attorney, Commission Dispute Attorney, Commission Dispute Lawyer, Contract Attorney, Los Angeles, Real Estate Attorney, Real Estate Commission Dispute, Statute of Frauds, Woodland Hills, Written Agreements

Is Your Agreement Worth the Paper it is Written On?

The California Supreme Court recently answered that question with a resounding “No”. In one of its early decisions in 2013, Riverisland Cold Storage vs. Fresno-Madera Production Credit Association, the Court rejected what had previously been a long standing exception (since 1935) to what is known as the “parol evidence rule”. In brief, the parol evidence rule restricts one’s ability to present evidence, in certain situations, that would contradict, alter or add to the terms of a written agreement.

The situation involved a couple who feel behind on their loan payments. They entered into an agreement which involved the lender agreeing not to take any enforcement action provided they continued to make the newly agreed upon payments. A representative of the lender told the couple, among other things, they would have a two year extension on the loan. When the couple was presented with the mountain of paperwork for them to sign which documented the agreement (which they, not uncommonly, did not read), the actual additional term was three months.

Ultimately the couple sued the lender, claiming that they had been defrauded in that they were told something contrary to what was in the agreement they signed. The Supreme Court, in a break from precedent that had been in effect for more than 75 years, held the couple could proceed with their claim. The court did note though that the burden of proving the necessary elements of their claim was significant.

If you have a question regarding this decision or a specific agreement, you can contact our Contract Attorney in Woodland Hills at Anker, Hymes & Schreiber, LLP.