Opinion ID: 1732706
Heading Depth: 2
Heading Rank: 2

Heading: whether the chancellor erred in entering judgment for commission in favor of the buyer's agent.

Text: ¶ 18. Hamilton next contends that the chancellor erred in awarding a 3% commission to The Buyer's Agent. The commission clause provides that Hamilton will pay The Buyer's Agent the commission at the time of closing from the proceeds of the sale: 10. COMMISSION. The parties hereby agree that The Buyer's Agent [ ] is the procuring cause of this contract and is therefore entitled to a commission. As a part of this contract and being due and payable through the terms of this contract, the Seller understands that this offer to purchase is contingent on The Buyer's Agent [ ] receiving a fee derived from the proceeds of the transaction in an amount equal to 3% of the final purchase price to be paid to The Buyer's Agent [ ] at the time of closing on behalf of the purchaser. The Buyer's Agent [ ] is receiving no compensation from the seller's representative. (emphasis added). Hamilton contends that since there was no closing, The Buyer's Agent is not entitled to a commission. ¶ 19. Mississippi case law on the issue of broker commission has almost exclusively dealt with a broker representing a seller who demands a commission for locating a buyer, rather than a broker representing a buyer who demands a commission for locating a seller. See Varner Real Estate, Inc. v. Bobb, 491 So.2d 528 (Miss.1986); Minter v. Hart, 208 So.2d 169 (Miss.1968); Crichton v. Halliburton & Moore, 154 Miss. 265, 122 So. 200 (1929); Lizana v. Brown Realty Co., 146 Miss. 758, 111 So. 867 (1927); Hays v. Goodman-Leonard Realty Co., 146 Miss. 766, 111 So. 869 (1927); Long v. Griffith, 113 Miss. 659, 74 So. 613 (1917). ¶ 20. The general rule of brokerage contracts is that when a principal and a broker enter into a contract and the contract specifies the price and terms of sale, the agent performs his duty, and is entitled to a commission, when he procures a purchaser ready, willing and able to buy, even though the owner may then decline to sell. Varner Real Estate, 491 So.2d at 529 (quoting Partee v. Pepple, 197 Miss. 486, 20 So.2d 73, 78 (1944)); Lizana, 111 So. at 868; Hays, 111 So. at 870. Many of these listing agreements, however, were either oral [4] or written, but made no specific provision for precisely when the commission was due. See, e.g., Minter v. Hart, 208 So.2d 169 (Miss.1968) (providing only for payment of commission of 6% of purchase price). ¶ 21. In awarding the commission to The Buyer's Agent, the chancellor relied on Mississippi case law in which a commission was awarded to a broker for representing a seller when, in the instant case, a broker is demanding a commission for representing a buyer. He also cited Magnolia Fed. Sav. & Loan Ass'n v. Randal Craft Realty Co., 342 So.2d 1308 (Miss. 1977), which applied quasi-contractual principles to justify awarding an $11,500 commission. The chancellor specifically held that Hamilton owed a commission to the Buyer's Agent because it fulfilled all of its duties up to closing by finding a house accepted by Hamilton and preparing a contract which Hamilton signed: [T]hey had a legal relationship implying that [The Buyer's Agent] would be compensated for real estate work for Hamilton. [The Buyer's Agent] in fact did find a house, find one that Hamilton accepted, prepared the offering contract which Hamilton signed, and handled the agency duties until the proposed closing. By breaching the Hopkins contract, Hamilton breached [The Buyer's Agent] contract as well. ¶ 22. Contrary to the chancellor's holding, the ready, willing and able rule is not dispositive on this issue. The contract contained a specific provision providing when the commission became due, specifically, at the time of closing and from the proceeds of the transaction. In Hamilton's case, The Buyer's Agent is bound to the specific terms of the contract. Unlike a real estate broker's general contract of employment, a special contract of employment imposes conditions upon the real estate broker's right to a commission. A broker may by special agreement make the payment of commission dependent upon a contingency, or the happening of a condition precedent, and unless that contingency occurs or the contingency happens, or its performance is excused, there is no right to recovery. Likewise, a seller is entitled to prescribe any lawful condition on the real estate broker's right to a commission to which the parties consent, notwithstanding the general rule that the broker is entitled to a commission if the broker is the procuring cause of the sale. 23 Richard A. Lord, Williston on Contracts § 62:19, at 380-81 (4th ed. 2002) (footnotes omitted). [5] See Hill v. Capps, 248 Miss. 601, 613-14, 160 So.2d 186, 191 (1964) (holding that [i]n the absence of a special agreement, if the services are performed in good faith, the broker is entitled to fair and reasonable compensation). See also R.J. Kuhl Corp. v. Sullivan, 13 Cal.App.4th 1589, 17 Cal.Rptr.2d 425, 431 (1993) (stating that parties to a brokerage contract are at liberty to adopt provisions making compensation depend upon any lawful condition stated). In this case, The Buyer's Agent negotiated a contract including a term specifically stating when and how its commission would be computed. We will enforce a contract when its terms are clear and unambiguous. If The Buyer's Agent wanted its commission contingent on procuring a seller ready, willing and able to consummate the transaction, it very easily could have contracted for as much. Such not being the case, The Buyer's Agent is not entitled to a commission, and we reverse the chancellor on this issue.