§ 2.6 Authority or Instructions to an Agent

The mere statement, made to one's own broker or other agent, of the terms on which one is willing to sell or to buy, is not in itself an offer that empowers anyone to accept. Thus, a ''listing'' of real property for sale with a broker is a contract or offer retaining the broker's services and is not an offer to sell.n1

The statement may empower the agent to make an offer;n2 but it is not itself an offer to sell, even to one who may happen to read the statement. This has special importance in those cases where the agent later makes an oral contract as authorized, but that is not enforceable because of the statute of frauds. Had the directions to the agent been an operative offer to contract, the document would have been a sufficient memorandum to satisfy the statute; not being an offer, it is not such a memorandum.n3

The agent, in making an offer, may use the letter of written instructions as a part of the offering process. In such a case, however, it is the agent who is making the offer, and not the principal in person. The agent must be shown to have adopted the written instructions as a mode of making the offer; and the writing itself is not sufficient for that purpose. Also, the principal's signature to the instructions is not a signature to the contract, or to a memorandum of the contract, sufficient to satisfy the statute of frauds.

The more modern Statute of Frauds provisions of Articles 2,n4 2A,n5 and 8n6 of the Uniform Commercial Code may produce a different result. They do not require the contract or a memorandum of the contract to be in writing. As stated in Comment 1 to § 2-201, ''All that is required is that the writing afford a basis for believing that the offered evidence rests on a real transaction.'' This language may be a bit hyperbolic as each of these sections has certain minimum requirements as to the description of the subject matter. However, written instructions to an agent could be the basis for crossing the threshold into a finding that there is sufficient written evidence to make the claim of a contract plausible.

Legal Topics:

For related research and practice materials, see the following legal topics:

Real Property LawPurchase & SaleContracts of SaleFormalitiesReal Property LawPurchase & SaleContracts of SaleEnforceabilityStatutes of FraudsCommercial Law (UCC)Sales (Article 2)Form, Formation & ReadjustmentStatutes of FraudsFormal RequirementsContracts LawFormationOffersGeneral OverviewCommercial Law (UCC)Sales (Article 2)Form, Formation & ReadjustmentStatutes of FraudsGeneral OverviewBusiness & Corporate LawAgency RelationshipsAuthority to ActStatutes of FraudsCommercial Law (UCC)Sales (Article 2)Subject MatterDefinitionsGeneral OverviewBusiness & Corporate LawAgency RelationshipsAuthority to ActContracts & ConveyancesFormation & Negotiation

FOOTNOTES:

(n1)Footnote 1.

U.S. - Gumbin v. Alexander, 22 F.2d 889 (7th Cir.1927) ; Bernstein v. Yee Wong, 236 F.Supp. 5 (D.D.C.1964) .

Kan. - Schuhmacher v. Lebeck, 103 Kan. 458, 173 P. 1072 (1918) .

N.J. - Rose v. Minis, 41 N.J.Super. 538, 125 A.2d 535 (1956) .

(n2)Footnote 2. In Lacey v. Cardwell, 216 Va. 212, 217 S.E.2d 835 (1975) , a property owner authorized a realty agent to auction a farm on or about June 30. The authorization further stated, ''Sales agent is authorized under this contract to offer the entire property for the sum of $250,00 until June 15....'' This was held to authorize the agent to make an offer.

In Rochester Real Estate Co. v. Walhalla Sales Corp., 262 S.C. 676, 207 S.E.2d 100 (1974) . A written document in the form of a sales contract was signed by real estate broker and purchaser. It provided that the ''sale is subject to approval of owner.'' It was properly held that this document contained an offer which became a contract when the owner approved.

(n3)Footnote 3.

R.I. - MacKnight v. Pansey, 122 R.I. 774, 412 A.2d 236 (1980) .

Tenn. - Lusky v. Keiser, 128 Tenn. 705, 164 S.W. 777 (1914) .

(n4)Footnote 4. U.C.C. § 2-201.

(n5)Footnote 5. U.C.C. § 2A-201.

(n6)Footnote 6. U.C.C. § 8-319.