Question

On May 1, Corporate Properties, Inc., a commercial property owner, asks Erik Woodruff, a real estate agent, to help market and sell Corporate Properties’ office building. Under the terms of Corporate Properties’ offer, if a buyer makes a serious offer to buy the building within sixty days, Corporate Properties must pay Erik’s commission. Erik puts signs on the building, ads in real estate pamphlets and a locally focused Web site, features the property in a “walking” tour online, and shows the building to potential buyers. On June 1, Corporate Properties tells Erik that it is canceling their arrangement. Five days later, Corporate Properties closes a sale on the building without Erik’s participation. Erik files a suit against Corporate Properties for the amount of his commission. In whose favor is the court likely to rule, and why?

Answer 1

Court will see the fact about the actual reason behind sale of building because it might be that sale of building is due to efforts of Erik or from some other efforts.It is given in the question that building is sold without participation of Erik hence it is clear that Erik is not entitled for commission because building is sold after June 1. Thus court will rule in favor of Corporate Properties Inc. because as per information of the question it is clear that Corporate Properties Inc. has made a valid agency relationship with Erik Woodruff so that its buildings can be sold in market easily. And it is also given that if within 60 days from the date of May 1 any serious offer is made by buyer then Corporate Properties Inc. will have to pay commission but as agency relationship ended on June 1 and sale of building after this date is made without involvement of Erik hence court will take favor of Corporate Properties Inc.

Thus on the basis of above facts it is clear that Corporate Properties Inc. is not bound to pay commission to Erik.