61. A licensee obtains a listing for a property owned by Jones and then introduces a prospect, Bailey, to Jones. Jones and Bailey negotiate, but Jones sells to another buyer, Smitts. Six months later, Smitts sells the property to Bailey. Is the licensee entitled to a commission from Smitts
Answer: D
No, because the licensee's listing agreement was with Jones.
The licensee is not entitled to a commission from Smitts because the listing agreement was specifically with Jones, the property owner. The commission is typically owed only when the terms of the listing agreement are fulfilled, which in this case did not occur since the sale was made to a different buyer.
A) Yes, because the licensee originally interested Bailey in the property.
While it is true that the licensee introduced Bailey to the property, the mere introduction does not guarantee a commission. The licensee's entitlement to a commission is contingent upon the sale being made under the terms of the listing agreement, which was not the case when Jones sold to Smitts.
B) Yes, because negotiations between Jones and Bailey were made in good faith.
Good faith negotiations do not establish a right to commission unless they result in a sale through the terms of the listing agreement. In this scenario, since the sale did not consummate between Jones and Bailey, the licensee is not entitled to a commission from Smitts.
C) No, because Jones' property was resold after 3 months.
The timeline of the resale is not the determining factor for commission entitlement. The key issue lies in the fact that the licensee had a listing agreement with Jones, and since the transaction did not occur under that agreement, the timing of the resale does not affect the commission rights.
D) No, because the licensee's listing agreement was with Jones.
This is the correct reasoning. The licensee's commission rights are tied to the performance of the listing agreement with Jones. Since Smitts purchased the property from Jones rather than through the efforts of the licensee and then later sold to Bailey, there is no basis for claiming a commission.
Conclusion
The licensee is not entitled to a commission from Smitts because the listing agreement was solely with Jones and did not extend to subsequent transactions involving the property. The other options fail to recognize that the commission is directly tied to the fulfillment of the terms of the listing agreement, which was not satisfied in this case. Therefore, the only correct reasoning aligns with the fact that the licensee’s contractual relationship was limited to Jones.