On May 1, Faith, a real estate agent, and Grace, a commercial property owner, sign an agreement to find a buyer for Grace's office building. Under the terms, if a buyer makes a serious offer within sixty days, Grace must pay Faith's commission. Faith puts signs on the building, ads in real estate pamphlets and a local newspaper, and features the property in a "walking" tour on the Internet. On June 1, Grace tells Faith that she is canceling their arrangement. Ten days later, Grace closes a sale on the building without Faith's participation. Faith files a suit against Grace for the amount of her commission. In whose favor is the court most likely to rule and why?

Question

What will be an ideal response?

Answer 1

The court is most likely to issue a judgment in Faith's favor on the basis that the parties in this situation had agreed to a unilateral contract. The court would likely reason that Faith had begun performance under this contract by putting up the signs, placing the ads, and adding a featured tour of the building on the Internet. Under the present-day view of unilateral contracts, once a party to such a contract has begun performance, the other party cannot legitimately revoke or otherwise cancel the deal. Thus, Grace's attempted revocation in this problem¾which was probably based on her desire to avoid paying a commission to Faith¾would constitute a breach of her contract with Faith, and Grace would owe Faith her commission even though Faith did not participate in the closing of the sale on the property. The problem does not mention whether Faith found the buyer, but Grace would most likely be liable for the payment of the commission under the terms of her contract with Faith even if Grace found the buyer herself.