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…)