In Richardson v. Snipes' both parties to an exchange of land employed the plaintiff, the contract providing that the defendant would pay no commission unless the transfer was completed. The other party satisfied the conditions imposed by the defendant, who, however, refused to go through with the exchange. The court properly reversed judgment for the defendant; but the result should not have turned upon the finding of bad faith of the defendant, as the court held. The plaintiff had performed his undertaking which was to provide one who would exchange titles and who would have gone through with the transaction but for the refusal of the defendant. A condition as to the completion of a transaction has effect only if the other party, having contracted, refuses to perform, or if there are extraneous circumstances which prevent completion. All courts agree that the broker is entitled to his commission if failure to satisfy a condition is the fault of the employer. The rule involving bad faith is applicable only where the bargaining parties have not come to an agreement but where they are so close to one that it can be found that the relation with the broker is terminated in order to avoid payment of his commission. That was the situation in the cases cited as authorities by the court.
Warren A. Seavey,
Agency -- 1960 Tennessee Survey,
13 Vanderbilt Law Review
Available at: https://scholarship.law.vanderbilt.edu/vlr/vol13/iss4/7