Summary
holding that because "no objective method or formula was provided for determining" the plaintiff's compensation, which "must be definite" in a service agreement, the alleged contract "was merely an agreement to agree and was unenforceable"
Summary of this case from KJ Roberts & Co. v. MDC Partners Inc.Opinion
March 19, 1992
Appeal from the Supreme Court, New York County (Carol E. Huff, J.).
Plaintiff commenced this action to recover brokerage fees under an agreement with defendants which provided, inter alia, for the appointment of plaintiff as exclusive rental, and management sales agent for defendant's Charles Street property in Manhattan. The agreement further provided that defendants would pay plaintiff "on any commercial lease or on a sale, a commission to be separately determined." Defendants terminated the agreement and some seven months thereafter sold the premises through the efforts of another broker. Plaintiff had performed no services relating to the sale. Defendants moved to dismiss pursuant to CPLR 3211, which motion was granted by the court, finding that there was never a brokerage contract because of the absence of an essential term, the rate of compensation.
As price is an essential ingredient of every contract for the rendering of services, an agreement must be definite as to compensation (Ellenberg v Schneider, 109 Misc.2d 1058). Where no fee is stated, courts may not calculate a fee without custom and usage evidence to establish an extrinsic standard which is "'fixed and invariable'" in the industry in question (Hutner v Greene, 734 F.2d 896, 900). As no objective method or formula was provided for determining a commission, the exclusive sales contract was merely an agreement to agree and was unenforceable (Martin Delicatessen v Schumacher, 52 N.Y.2d 105). Nor is the Uniform Commercial Code of assistance to plaintiff herein as it involves transactions in goods, not services (see, Communications Groups v Warner Communications, 138 Misc.2d 80).
Concur — Sullivan, J.P., Wallach, Asch, Kassal and Rubin, JJ.