Blackstone v. Thalman: Court Disagrees With Broker - Buyer Was Not "Ready, Willing and Able"

A 1997 case from the Court of Appeals of Texas examined whether a broker earned a commission for producing a "ready, willing and able" buyer. Blackstone v. Thalman. In this case, Terry Blackstone listed his home for sale for $750,000 with real estate broker Nancy Thalman. Thalman found a potential purchaser for the home, Carl Lewis, who offered $550,00 cash, and wanted possession 48 hours after closing. Blackstone did not accept the offer. Lewis made another offer, this time for $750,000, with possession seven days after closing, contingent on this receipt of an appraisal of at least $750,000. Blackstone agreed on the price and the closing date but not on the possession date; he wanted to stay in the home for 90 days after closing. The parties could not reach agreement, negotiations stalled, and a contract did not result.

Over two years later, Thalman sent Blackstone a letter requesting her commission. He refused to pay and she sued. The lower court found for the broker, holding that she had satisfied her duties under the listing agreement by procuring a ready, willing and able buyer for the property. Blackstone appealed, arguing that Thalman had not earned a commission. The Court of Appeals of Texas pointed to several Texas cases holding that a real estate broker has earned her commission when, within the time period specified in the listing agreement, she has procured a purchaser who is ready, willing and able to buy the property on the terms specified in the listing agreement or on terms and price acceptable to the seller.

The Blackstone/Thalman listing agreement stated that Thalman would earn a commission if she procured a buyer who was ready, willing and able to buy at the price and terms stated therein or at any other price and terms acceptable to Blackstone. Since Lewis had added certain terms that were not contained in the listing agreement, such as the satisfactory appraisal, it was clear to the court that Lewis had not offered to purchase Blackstone’s home on the terms specified in the listing agreement. Therefore, the question was whether Lewis had been willing to buy the property "at any other price and terms acceptable to "the seller."

Thalman argued that since Blackstone had agreed to Lewis’ demand for an appraisal and other terms, Blackstone had found those terms acceptable, thereby obligating him to pay Thalman a commission. The court disagreed, finding Thalman’s interpretation a violation of contract law basics. Lewis’ conditional offer to purchase the property was a counteroffer and Blackstone himself had responded with a counteroffer (wanting to retain possession for 90 days.) A counteroffer is a rejection of the original offer, not an acceptance. Stating that a compromise offered during contract negotiations simply is not an agreement, the court refused to "attribute to Blackstone an agreement which he considered, but never made."

According to the court, the phrase in the listing agreement "at any other price and terms acceptable..." does not include proposed terms which the seller conditionally agrees to during negotiations but which do not result in a contract. The court elaborated on this, explaining that the phrase only refers to modifications to the listing agreement, such as lowering the price. It protects the broker’s right to receive a commission if the parties modify the listing agreement and the broker procures a buyer who is ready, willing and able to buy the property on the modified terms.

Since there was no meeting of the minds between Blackstone and Lewis and Lewis never offered to purchase the property according to the terms of the listing agreement, the court found that Thalman had not found a ready, willing and able buyer for the property and therefore had not earned a commission.

Blackstone v. Thalman , 949 S.W.2d 470 (Tex. App. 1997).