Comments on: Another Instance of Semantic Ambiguity: “Buys”

By: Jack

Jack — Thu, 16 Jul 2009 17:09:37 +0000

Paul,
“since when does “buy” mean the point at which an agreement to purchase is formed?”

Granted that this decision is not about real estate, but dirt lawyers would ask “since when is “buy” the same as “take a conveyance of”? Under the doctrine of equitable conversion, courts treat the buyer as the owner for most purposes from the time the purchase agreement is signed, even though closing might not occur until months or even years later.

At common law, a broker earns the commission upon producing a buyer who is ready, willing and able to perform. Savvy sellers protect themselves by providing in the brokerage agreement that no commission is payable until closing.

By: Paul Comeaux

Paul Comeaux — Mon, 13 Jul 2009 22:42:27 +0000

I think that the second court’s questions are a bit disingenuous–e.g., since when does “buy” mean the point at which an agreement to purchase is formed? The intent of the contract language is reasonably clear, with a lot of ambiguity around the edges. It’s just very poorly drafted. What it seems to say is: Broker gets a commission for a deal that closes during the term. Then, Broker has a protection period of 12 months for deals that close with a buyer that Broker brought to the seller during the term.

I think maybe this case stands for a different proposition than the ambiguity of the word “buy”–that is, if you don’t spend the time to make your intent clear, don’t expect the court to do so for you.

By: Mark Anderson

Mark Anderson — Sun, 12 Jul 2009 05:46:55 +0000

Great example, Ken. As well as the important points that you raise, the paragraph that you have quoted is full of drafting errors, including:
1. Sometimes block caps, sometimes not, for party names.
2. Use of passive in obligations.
3. Approx 100 word sentence, with alternative provisions, conditions and exceptions lumped together in a stream of consciousness.
4. Loose/woolly language generally. The final section seems to be concerned with whether the buyer first became aware of the seller’s existence from the broker, but is not very tightly expressed.