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Current Developments in the Commercial Divisions of the
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Posted: March 19, 2018

Salesperson Supervised by a Broker Can Make Claim for Commission Based on Oral Contract

On February 20, 2018, Justice Ostrager of the New York County Commercial Division issued a decision in Saran v. Shanghai Chengtou (USA), LLC, 2018 NY Slip Op. 30292(U), holding that a salesperson supervised by a broker can make a claim for a commission based on an oral contract, explaining:

While it is clear on the pleadings that the parties never entered into a written agreement, plaintiffs have alleged an oral agreement stemming from the September 24, 2014 meeting with SMI. Under New York law, a licensed real estate salesperson generally enjoys exemption from the Statute of Frauds. To fall under the exemption, a licensed salesperson must operate under the supervision of a licensed broker. As discussed supra, whether Saran was truly working under the supervision of Khan is a dispute of material fact precluding pre-answer dismissal. The motion to dismiss plaintiffs’ claim for breach of contract is therefore denied.

(Internal quotations omitted).

Contract law–usually straightforward–has traps for the unwary, like the requirement that some contracts be in writing (the statute of frauds). And as this decision shows, sometimes there are ways to escape from those traps. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client face a situation where you are unsure how to enforce rights you believe you have under an oral contract.

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