11 Year Course of Dealing Waives Explicit Contract Terms

In a recent unpublished decision from the Appellate Division, the court found that a real estate broker had waived the right to receive quarterly commission payments in advance since the realtor failed to enforce that contractual provision for 11 years.  The commission agreement at issue was for the lease of a commercial property and stated that the realtor would be paid a 6% commission on the rent, "in four equal installments per year, in advance..."  While such payments were originally made in advance on a quarterly basis, at some point the owner switched to making monthly payments instead.  In ruling for the owner the trial court found that the realtor accepted, "monthly payments continuously for eleven years, thereby constituting a waiver of the quarterly payment schedule set forth in the agreement."  Such finding was upheld by the Appellate Division.  This case underscores the importance that parties to a contract not sit on their rights and enforce contractual provisions in a timely manner when they are not being followed.  (Barry H. Gertsman & Company v. 5218 Atlantic Avenue Associates LLC, et. al.)