A seller cancels a 6-month exclusive listing agreement with a California broker after only 2 months. Which of the following BEST describes the seller's legal obligation?
Correct Answer
A) The seller may owe the broker compensation for marketing expenses incurred and a commission if a buyer procured during the listing period later purchases the property
Under California agency law, a seller may revoke a listing agreement before its expiration, but revocation does not eliminate liability for breach of contract. California listing agreements routinely include a protection (safety) clause entitling the broker to a commission if a buyer procured during the listing period completes a purchase after cancellation. The broker may also seek damages for marketing expenses incurred in reliance on the contract. The seller's right to revoke the agency and the seller's potential financial liability are two separate legal questions.
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A buyer and seller in California have agreed to the sale of a residential property. The buyer's agent sends the fully executed purchase agreement to the escrow company. Under California law, when does the contract become binding on both parties?
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A buyer enters a purchase agreement for a California condo after the seller provides written documentation overstating the unit's square footage by 200 square feet. The seller knew the figures were false at the time of disclosure. Which legal concept gives the buyer the right to cancel the contract?