Supreme Court of Alaska
In the fall of 1977, Michael Stephens, sole proprietor of Stephens Construction, asked Warren Sanders, a local real estate broker, to find a large piece of land that would be suitable for development into a single family residential project. Sanders located several parcels and found a homestead staked and owned by Robert and Arlene Cross. Sanders contacted and met with Robert Cross in February of 1978 and stated that he was looking for land for a developer and had asked Cross to sign a listing agreement, but he refused. In September of 1978, Anders contacted Cross again and showed an offer from Stephens. Cross rejected this and two following offers. The third offer also listed Robert Milby, a local contractor, as co-purchaser. Cross then wrote up terms acceptable to him which was sent to Sanders, which were for 40 acres with the possibility of an option for the remaining 40. Sanders then typed up Cross’s proposal on a preprinted form agreement with one of the standard clauses stating that the broker was the sellers agent. Since the principals had not been met at this point, all negotiations and information passed through Sanders. Sanders made several representations as to the financial strength and development experience of both Stephens and Milby, although their accuracy is disputed. At the time that the purchase agreement was finally signed, on November 29, 1978, Cross also asked for financial statements for Stephens and Milby, but did not receive them. The purchase agreement provided for a 90 day period until closing. In Early December, Milby approached appellant James Foster, a painter contactor, and discussed the assignment of his interest in the contract. Cross was not informed of the assignment until February or March of 1979. Cross continued to insist on financial statements, which were still not given. Stephens’s financial position also deteriorated, leading to his bankruptcy filing in...