SW Legal studies in Business

Agency Relationship Need Not Be in Writing to Be Enforceable
Description

Appeals court held that a real estate agent who provided valuable service for a principal, by identifying property the principal purchased, should be paid a commission for his services. There need not be a signed agency agreement for a court to find that the parties intended to have an agency relationship.

Topic

Agency

Key Words

Contract; Compensation; Brokerage

C A S E   S U M M A R Y
Facts

Scheerer, a licensed real estate agent, and Fisher, a manager of commercial real estate, knew each other from past dealings. Scheerer told Fisher that certain properties he thought may be of interest to Fisher were on the market. Fisher looked into the properties and made an offer to buy them for $20 million. The contract called for a 2% commission for Scheerer from the seller and another 2% commission from the buyer (Fisher). That deal fell apart. Fisher then formed another company that bought the property. Scheerer was not paid a commission and sued, contending that he was an agent for Fisher and an implied contract for his services has been breached. The trial court dismissed the suit. Scheerer appealed.

Decision

Reversed. Scheerer was Fisher’s agent. The authority of an agent need not be in writing. The court will look to the nature of the relationship. It was clear from the original sale contract, which fell apart, that Fisher recognized Scheerer as his agent and was going to pay him a normal commission for his services. The fact that there was not a separate, written agency contract between Fisher and Scheerer does not mean that an agency did not exist. Scheerer may recover, in quantum meruit, for the value of the services he rendered to Fisher by identifying property that Fisher wished to buy. Fisher, as a professional in the real estate market, knew that Scheerer was an agent and should be compensated.

Citation

Scheerer v. Fisher, 688 S.E.2d 472 (Ct. App., N.C., 2010)

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