In an exclusive listing agreement, if the commission rate is not specified in writing, what typically occurs?
Correct Answer
D) The listing agreement may be unenforceable for lack of certainty
A contract lacking essential terms such as commission rate may be unenforceable due to uncertainty. All material terms, including compensation, must be clearly specified in writing for a listing agreement to be legally binding and enforceable.
Why This Is the Correct Answer
This answer is correct because remuneration is an essential term of a listing agreement. If it is not specified, the agreement may be unenforceable for lack of certainty, since a court cannot supply a price the parties never agreed on and there is no legal standard rate to fall back on. The brokerage might at most seek reasonable payment for its services on another legal basis, but not under the uncertain contract.
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In an Agreement of Purchase and Sale, what is the primary purpose of a condition precedent?
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In an exclusive listing agreement, the seller agrees to pay a 5% commission. During the listing period, the seller finds a buyer independently and completes the sale without any involvement from the listing agent. What is the agent's entitlement to commission?