Background
In August 2016, Bradshaw’s Body Shop, Inc., an auto collision repair and wrecker business in Lincoln Parish, Louisiana, entered into a 24-month exclusive listing agreement with Victus 1, Inc., d/b/a Benchmark Business Brokers, granting Victus the exclusive right to sell the business. The agreement originally covered the sale of the business itself as an incorporeal entity; the parties later informally agreed to include the sale of the underlying real property, though the written contract was never amended to reflect that change. The contract set an asking price of $1,300,000 (reduced from an original $1,754,000) and provided that if the seller cancelled or withdrew the listing during the term, a commission of 10% of the asking price would become immediately due.
On February 28, 2017—well within the 24-month listing period—Bradshaw’s manager Tracey Bradshaw Witt sent written notice terminating the agreement, alleging that Victus had breached its fiduciary duty by failing to communicate a prospective buyer’s interest and by allegedly misrepresenting to that buyer that the property was no longer for sale. Victus filed suit for breach of contract, seeking $130,000 (10% of $1,300,000). Bradshaw opposed on multiple grounds, including that Victus’s owner Marc Able lacked a valid real estate license at the time of contracting—a license that had been issued in error and later required Able to sit for an examination.
After years of motion practice, a bench trial was held in February 2025. The trial court found the listing agreement valid, credited Able’s testimony that he was unaware of any licensing defect while the agreement was in force, and awarded Victus $130,000 in commission plus $32,865.34 in attorney fees, expenses, and costs. Bradshaw appealed.
The Court’s Holding
The Second Circuit affirmed the trial court’s finding that the listing agreement was enforceable as to the sale of the business itself, applying its earlier precedent in Victus 1, Inc. v. Stocky’s World Famous Pizza #14, Inc., 52,221 (La. App. 2 Cir. 9/26/18), 256 So. 3d 1146, which upheld the same form contract under similar circumstances. The court acknowledged the contract’s liquidated-commission clause was “unduly onerous” but held that the parties were bound by its clear and unambiguous terms. Because Bradshaw cancelled the listing during the agreed term, the 10% commission on the business value was properly triggered.
However, the court reversed the trial court’s application of the commission to the combined business-and-real-property asking price. Because the original written agreement covered only the incorporeal business, and the subsequent oral agreement to add the real property was never reduced to a signed written amendment as required both by Louisiana law governing mandates to sell immovable property and by the contract’s own integration clause (Paragraph 18), the agreement was unenforceable as to the immovable property component. The $1,300,000 asking price on which the $130,000 award was calculated blended the value of both the business and the land, making the award legally defective to the extent it captured real-property value.
The court therefore remanded to the trial court for a separate judicial determination of the value of the business alone and the corresponding 10% commission. It affirmed the trial court’s award of attorney fees to Victus as the prevailing party under Paragraph 9 of the contract, but declined to award additional appellate attorney fees, finding the appeal was not frivolous and had a reasonable basis in both fact and law. Each party was ordered to bear its own costs on appeal.
Key Takeaways
- An oral agreement to expand a business-sale listing to include immovable property is unenforceable in Louisiana if not memorialized in a signed written amendment—both under the Civil Code’s mandate requirements and any contract provision requiring written modifications.
- A liquidated-commission clause triggered by the seller’s early cancellation will be enforced even if the court views it as onerous, provided the contract language is clear and unambiguous.
- A broker’s licensing defect will not automatically void a contract where the broker was unaware of the defect during the listing period and the seller cannot show intentional misrepresentation.
- Appellate attorney fees for frivolous appeal are penal and strictly construed; a legally colorable argument—even an ultimately unsuccessful one—is sufficient to defeat a frivolous-appeal claim.
Why It Matters
This decision is a practical reminder for business brokers and their clients that any expansion of a listing agreement to cover real property must be formalized in a signed written amendment. Failure to do so leaves the broker without an enforceable claim for commission on the real estate component, potentially reducing recovery significantly when land value represents a substantial portion of the asking price. Brokers operating in Louisiana should treat mid-engagement scope changes with the same formality as the original contract.
For sellers, the case reaffirms that early-termination commission clauses in exclusive listing agreements carry real financial consequences regardless of the seller’s stated justification for cancellation. Unless a broker’s breach is sufficiently established to justify rescission, a seller who withdraws a listing before the agreed term expires will owe the liquidated commission on the business value—even when the relationship has broken down.