Legal Definitions - procuring cause

Procuring Cause

"Procuring cause" refers to the direct and continuous efforts of an individual or entity that ultimately lead to a specific result, such as a sale, a contract, or a transaction. It means that the actions taken were the primary and unbroken chain of events that brought about the desired outcome, even if the individual was not present at the final closing or if other parties became involved later. The key is that their efforts were the essential force that initiated and completed the transaction. This concept is frequently used in commission-based industries, like real estate or sales, to determine who is entitled to payment.

• Example 1: Real Estate Commission

  Imagine a real estate agent, Sarah, shows a specific house to a potential buyer, Mark. Mark expresses interest but doesn't make an offer immediately. Sarah follows up with Mark over several weeks, providing additional information about the property and neighborhood. A month later, Mark attends an open house for the same property, hosted by a different agent from Sarah's brokerage, and decides to make an offer and purchase the home. Even though another agent was present at the final decision point, Sarah could argue that her initial efforts and continuous follow-up were the procuring cause of the sale, entitling her to the commission. Her actions directly initiated and maintained the buyer's interest, leading to the eventual purchase.

• Example 2: Business Development Deal

  Consider a business development consultant, David, who identifies a strategic partnership opportunity between two companies, Alpha Corp and Beta Inc. David facilitates initial meetings, introduces key decision-makers, and helps both parties understand the mutual benefits of collaboration. After several months of discussions that David initiated and guided, the companies agree to a major joint venture. However, David's consulting contract expires just before the final legal documents are signed, and the companies complete the deal directly. David could claim that his efforts were the procuring cause of the joint venture, as his introductions and foundational work were the essential catalyst that brought the deal to fruition, even if he wasn't involved in the very last stage of negotiations.

• Example 3: Sales Representative Commission

  A software salesperson, Emily, spends six months cultivating a relationship with a large corporate client. She conducts numerous product demonstrations, addresses their specific technical requirements, and customizes a proposal to fit their needs. The client indicates they are ready to sign a multi-year contract. Before the final paperwork is processed, Emily is promoted and transferred to a different department. Another salesperson from her team steps in to finalize the administrative details and secure the signature. Emily could argue that her sustained and direct efforts over many months were the procuring cause of the sale, as her work directly led to the client's decision to purchase the software, making her eligible for the commission.