Question of the Day

Owner Jones gives broker Smith a 90-day exclusive listing. One week into the listing, Jones notifies broker Smith in writing that he is terminating the listing. The next day, owner Jones signs an open listing with broker King. Within a week, Broker King brings in an offer, which owner Jones accepts. As to the commission, which of the following is true?

Explanation

Listing contracts generally have a clause protecting brokers from early cancellation. Most likely, Jones will be liable to both brokers because King procured a buyer, but Smith was protected by the terms of the original 90-day exclusive listing. Remember- one party to a contract can't "unilaterally" decide to cancel the contract, as Jones tried to do to Smith with his written notification. Cancellation of a valid contract requires mutual consent.

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