Can I force a yacht broker to release me from a listing agreement?

I retained a yacht broker in California this summer to sell my boat under an exclusive listing agreement. I selected this particular broker because he was able to provide a slip for my boat that was next to his office, which is in a marina very close to my home. Unfortunately they just informed me that they were losing their office lease and that I need to come pick up my boat. They have advised me to list the boat with someone else, but their agreement is still in place and I don’t want to pay two commissions. I plan to report them to the California Yacht Brokers Association, but I am also curious about my legal rights. Can I force them to release me from their listing agreement? Do I have any other legal recourse against them?

I will note at the outset that our reader’s response to his yacht broker’s lease problem seems a bit harsh. We may not have the entire story, but it appears that the broker lost his lease through no fault of his own. So let’s keep that in mind as we answer his questions.

Our reader did not specifically ask about the role of the California Yacht Broker’s Association (CYBA) in a dispute, but he plans to “report” the broker to the CYBA so let’s take a look at that process.

The CYBA is a private non-profit trade organization. Their members include licensed yacht brokers and salespersons throughout the state of California, as well as various affiliates in related industries, but membership is entirely voluntary. In California the CYBA is often compared to the California Association of Realtors (CAR). CAR and CYBA are similar in that they are both trade organizations for brokerage professionals, but membership in CAR is almost universal for all real estate professionals in California and the organization has hundreds of thousands of members. By contrast, the CYBA is a very relevant organization within the California yachting community, but it has less than a thousand members so its resources are very limited.

The CYBA does have a Code of Ethics, and the organization will listen to consumer complaints, but only if the broker in question is a member of their organization. Further, even if they do listen to a consumer complaint about one of their members, they have no authority to fine or otherwise discipline a member other than to expel the member from the organization, and to my knowledge that has never happened. The CYBA does administer an arbitration program which is available for dispute resolution in lieu of conventional litigation, but the program is designed to resolve specific monetary disputes between parties involved in a yacht sale transaction.  It is not a consumer protection or advocacy program. So in the end a “report” to the CYBA is not particularly helpful. He may instead want to consider a report to the California Division of Boating and Waterways, which is the state agency that regulates yacht brokers.

Next we will look at our reader’s request to be “released” from his listing agreement to avoid the obligation to pay two commissions when the boat is ultimately sold. Exclusive listing agreements in California must have an agreed upon expiration date, so in this case I am assuming that the expiration date is not imminent since in that case he could simply wait for it to expire. Brokers also frequently include a provision for either side to terminate the agreement prior to the expiration by given written notice effective after a stated number of days, even where there is no breach of the agreement.

Our reader, however, wants to cancel the listing agreement immediately, which may not be possible under the cancellation and expiration provisions of the agreement. In this case he may have a legal right to extract himself if he can establish that the broker breached the listing agreement by failing to provide a slip for his boat.  But he should in any case contact the broker in writing immediately for more information.  The broker may agree to cancel the agreement voluntarily under the circumstances of this case.

Finally, our reader asks whether he has any legal recourse against the broker. My immediate response is to ask why exactly he is seeking legal recourse. Recourse for what? A lawsuit for breach of contract must be based upon some measure of monetary or property damage suffered by the injured party. In this case our reader needs to find a new broker and a new slip, but it does not appear that he has suffered any monetary damages. The law does not, unfortunately, allow recovery for heartburn and hassle.

Business arrangements are built upon certain presumptions and a shared understanding of fundamental facts and circumstances. Sometimes those circumstances change, but those changes do not always allow for legal recourse. So keep an open mind when you talk to your attorney about your case.

David Weil is licensed to practice law in the state of California and, as such, some of the information provided in this column may not be applicable in a jurisdiction outside of California. Please note also that no two legal situations are alike, and it is impossible to provide accurate legal advice without knowing all the facts of a particular situation. Therefore, the information provided in this column should not be regarded as individual legal advice, and readers should not act upon this information without seeking the opinion of an attorney in their home state.

David Weil is the managing attorney at Weil & Associates (weilmaritime.com) in Long Beach. He is an adjunct professor of Admiralty Law at Loyola University Law School, is a member of the Maritime Law Association of the United States and is former legal counsel to the California Yacht Brokers Association. If you have a maritime law question for Weil, he can be contacted at 562-438-8149 or at dweil@weilmaritime.com.

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