14. When commissions are due.—It can be laid down as a rule that commissions are due and payable as soon as the broker has done the work for which he was employed; that is, as soon as he has brought to the owner a purchaser ready, willing and able to buy on the owner's terms. The broker does not have to wait until title closes or even until the contract is signed. This may be modified, however, by express agreement made prior to the time the commission is earned. If, after he has earned his commission, an agreement is made by the broker to wait until title closes, or to make his commission dependent upon the happening of any event or to take less than the usual commission, or to waive commission entirely, it is not binding upon the broker and can be disaffirmed by him. It cannot be enforced against the broker be cause no consideration was given for his promise. There are cases, however, where the owner in closing negotiations with a purchaser either agrees to accept a lower price for his property, or modifies the terms of the financial settlement upon the express condition that the broker waive his right to commission until a later date, or accept a smaller amount. Such an agreement is for a consideration and is binding.
The broker is not responsible for failure of the cus tomer to complete the contract. If the broker brings a customer answering the description we have.already noticed, and the owner enters into a contract with him, it is the owner's responsibility to get a sufficient sum paid on the contract as earnest money at least to cover the broker's commission. If the owner does not do so, that is his affair. He may accept a fifty dollar deposit upon the sale of a piece of property and be come liable to the broker for a one hundred dollar commission. The broker does not lose his commission because the owner fails to require a large enough de posit on the contract. .
When the payment of commission is deferred until passing of title by valid agreement, and title never passes because it is defective, or for any other reason for which- the seller is responsible, the broker is en titled to commission notwithstanding such agreement.
15. Purchaser sometimes employer of broker.— The broker is usually employed by the owner to sell the owners' property. As the agent of the owner his duty is toward his employer. In the final analysis, however, the purchaser pays the commission, for it can be assumed that the owner includes the commission in determining the price of his real estate. In a few cases the purchaser employes the broker to buy prop erty for him, and then the broker's duty is toward the purchaser. All that has been said about the agent's duty to his employer applies with the same force when the purchaser is the employer. Furthermore, it is considered perfectly proper for a broker employed by a purchaser to go to an owner and get his lowest price obtain an agreement from the owner that out of the price the broker shall get a commission. The owner in such cases knows he is dealing with an agent for the purchaser, and the purchaser knows the owner pays the broker a commission. Brokers as sembling large plots for buyers frequently have made this arrangement. The site for the terminal of the Pennsylvania Railroad in New York is an example. In some cases the owner is asked to quote his lowest net price, the commission being paid by the purchaser.
16. Rate of commission.—Rates of commission are fixed by custom and agreement. There is no legal fixed rate of commissions, but the customary rate in the community will be understood to be the rate un less there is an express agreement for a different one. It is poor business for brokers to accept less than the customary rate. A short, interesting and instructive article, and collection of authorities applicable to the laws in Canada relating to commissions to real estate agents may be found in Volume 48, Canada Law Journal, page 549.