ShareA Texas court has considered whether a salesperson had a duty to inform his client that the purchase agreement required him to deliver contract termination forms by the deadline contained in the purchase contract.
Michael Calvin (“Buyer”) hired Mark Martin (“Salesperson”) to serve as his real estate professional in his search for a new home. On April 5, 2004, the Buyer entered into a purchase agreement with Margaret Schmucker (“Seller”) for the sale of her home. The purchase contract gave the Buyer the right to terminate the agreement within ten days after acceptance, or April 15, 2004.
The Buyer had the property inspected on April 14th, and on April 15th he faxed a contract addendum to the Seller listing the repairs he would like the Seller to make on the property. The Seller rejected some of the repair requests, and so the Buyer told the Salesperson that he was canceling the purchase contract at 2:35 PM on the 15th. The Salesperson sent the Buyer two emails five minutes later, one containing language canceling the purchase contract and the other a release of the earnest money. The email did not contain the Seller’s contact information.
The Buyer didn’t open the emails until later that night, and he didn’t fax the executed documents until the next day to the Salesperson’s office. Following receipt of the faxed document, the Salesperson emailed the Buyer, telling him that he hoped that the listing broker would overlook the fact that the Buyer had missed the termination deadline. The Buyer reacted angrily upon learning that he had missed the deadline, emailing the Salesperson that there were no instructions about meeting the deadline in the email that he had received and also that he couldn’t afford to “throw away” the earnest money.
Eventually, the Seller filed a lawsuit against the Buyer for breach of the sales contract. As part of these proceedings, the Buyer filed a third-party negligence action against the Salesperson and his broker. The trial court ruled in favor of the Salesperson and his broker, and the Buyer appealed that ruling.
The Court of Appeals of Texas, Austin, affirmed the trial court. The Buyer claimed that the Salesperson had a duty to inform him that the termination forms needed to be sent to the Seller immediately and also he should have provided the Seller’s contact information in the email. By failing to do these things, he allegedly acted negligently. The elements for a negligence claim are a legal duty to protect another against injury, a breach of that duty, and damages proximately caused by that breach.
The court examined whether the Salesperson was the proximate cause of the Buyer’s damages. The question for the court was whether the Salesperson was the cause-in-fact of the Buyer’s injuries. A party is imputed knowledge of a contract that the party signs. Here, the purchase contract signed by the Buyer established a termination deadline of April 15th. The Salesperson promptly sent the Buyer the termination forms after the Buyer decided to terminate the agreement, and it was the Buyer’s failure to act in a timely manner that caused the Buyer damage. The court found no support for the Buyer’s negligence allegations, and so the court rejected these allegations. Therefore, the court affirmed the lower court rulings in favor of the Salesperson and his broker.
Calvin v. Martin, No. 03-05-00768-CV, 2006 WL 2706960 (Tex. App. Sept. 21, 2006). [This is a citation to a Westlaw document. Westlaw is a subscription, online legal research service. If an official reporter citation should become available for this case, the citation will be updated to reflect this information].