BROKERS

5 definitions found across Law Mind sources

BROKERSAuthored
The Law Mind • 1267 words
Definition
Brokers are intermediaries engaged to negotiate contracts or transactions on behalf of others, without taking custody or ownership of the property or assets involved. The broker's role is fundamentally one of facilitation: bringing parties together, negotiating terms, and earning a commission or fee upon the completion of a transaction. The term encompasses several distinct professional categories unified by this intermediary function: 1. Real estate brokers — licensed professionals who facilitate the purchase, sale, lease, or exchange of real property on behalf of clients. 2. Securities broker-dealers — individuals or firms that execute the purchase and sale of securities on behalf of customers, or in some cases for their own account, subject to extensive federal and state regulatory frameworks. 3. Insurance brokers — intermediaries who place insurance coverage with insurers on behalf of clients, as distinct from agents who represent the insurer. 4. Commodity and financial brokers — intermediaries operating in futures, currency, or other financial markets. 5. General commercial brokers — historically, persons employed to negotiate contracts for the sale of goods, ships, or other commercial instruments. In each context, the defining characteristic is the absence of custody or title: a broker acts for others, not as a principal to the transaction. ---
Common Language
Modern common usage (Wiktionary): Plural of broker. In general usage, a broker is any person who acts as an intermediary or negotiator, often in commercial dealings. Historical common usage (Webster's 1913): One who transacts business for another; an agent who negotiates contracts of purchase and sale; a dealer in money, notes, stocks, and the like. The legal meaning tracks the common meaning closely but carries significant technical weight that casual usage obscures. Legally, whether someone qualifies as a broker — rather than an agent, dealer, or principal — determines licensing requirements, fiduciary duties, liability exposure, and regulatory obligations. The word "broker" in a contract or regulatory context is not merely descriptive; it is a term of legal classification with concrete consequences. ---
Common Confusion
Brokers are frequently confused with agents, and the relationship between the two concepts requires care. A broker is a species of agent, but the terms are not interchangeable. An agent typically has ongoing authority to act on behalf of a principal and may bind the principal contractually. A broker is more narrowly defined as an intermediary for a specific transaction, and the scope of authority to bind either party is generally more limited. The dual-agency problem compounds this confusion: brokers are sometimes described as agents of both parties, but this is an oversimplification. As Bouvier's notes, a broker is initially the agent only of the employing party and does not automatically become the agent of the counterparty. When a broker purports to represent both sides of a transaction, distinct legal and ethical duties arise — particularly in real estate, where dual agency is heavily regulated and must be disclosed. Brokers should also be distinguished from dealers. A dealer takes title to property or securities and resells as a principal; a broker executes transactions for others without taking title. This distinction is foundational in securities regulation. ---
Recognized Forms
/SUBTYPES Real Estate Broker: Licensed under state law to represent buyers, sellers, landlords, or tenants in property transactions. May supervise licensed sales agents operating under their license. Broker-Dealer: A securities industry term for a firm or individual that acts as both a broker (executing transactions for clients) and a dealer (trading for its own account). Subject to SEC and FINRA regulation. Insurance Broker: Represents the insured in placing coverage, as opposed to an insurance agent who represents the insurer. The distinction affects whose interests are owed a duty of care. Pawnbroker: Historically a distinct category — a person who lends money on the security of personal property left in their custody. Regulated separately and largely outside the modern general broker framework. Mortgage Broker: Facilitates loan origination between borrowers and lenders without itself funding the loan. Subject to both federal and state licensing requirements. ---
Why It Matters in Research
Researchers working in historical sources must be alert to the fact that "broker" was a more unified concept in early common law and equity than it is today. Bouvier and similar nineteenth-century sources treat brokers primarily as commercial intermediaries in goods, ships, and bills of exchange, with real estate and securities brokerage as subordinate or undifferentiated categories. Modern law has fractured brokerage into heavily siloed regulatory regimes, and the duties, liabilities, and licensing requirements differ substantially across sectors. For real estate research, the fiduciary duty question is central. The shift from brokers as mere transaction facilitators to fiduciaries owing loyalty, confidentiality, and disclosure obligations to clients is a significant doctrinal development of the twentieth century. Pre-twentieth-century sources will not reflect this framework adequately. The Law Mind Real Estate encyclopedias address the modern fiduciary and liability frameworks directly. For securities research, the term "broker-dealer" is the operative regulatory category under federal law. Historical dictionary definitions will not capture the Securities Exchange Act framework, FINRA oversight, or the ongoing regulatory debate over the fiduciary versus suitability standard for broker advice. The dual-agency problem appears in historical sources but is far more elaborated in modern doctrine, especially in real estate. Researchers should not assume historical treatments of broker agency adequately capture current disclosure and consent requirements. Jurisdictional variation in licensing is substantial: what constitutes the practice of real estate brokerage requiring a license, what exemptions exist, and how unlicensed brokerage affects commission recovery all vary by state and require current state-law research alongside historical sources. ---
Historical Dictionary Support
Bouvier's Law Dictionary defines brokers as those "engaged for others in the negotiation of contracts relative to property, with the custody of which they have no concern," citing Paley on Agency. This definition captures the essential intermediary character and the absence of custody — elements that remain analytically sound today. Bouvier's reference to Comyns' Digest under "Merchant, C." situates brokers within the commercial law tradition, reflecting the historical primacy of mercantile brokerage. The note that a broker "is deemed the agent only of the person by whom he is originally employed, and does not become the agent of" the counterparty automatically is a point of enduring doctrinal relevance, though modern dual-agency doctrine has elaborated considerably on when and how that status can shift. Bouvier's treatment does not address licensing, regulatory frameworks, or the fiduciary duty elaborations that characterize modern brokerage law. For historical research on pre-regulatory commercial brokerage, Bouvier provides a useful baseline. For anything touching modern practice, it must be supplemented with current statutory and regulatory sources. ---
Jurisdictional Note
Real estate broker licensing, the scope of agency duties, dual-agency disclosure requirements, and the consequences of unlicensed brokerage on commission recovery are all state-law matters with significant variation. Securities broker-dealer regulation is primarily federal but intersects with state blue-sky laws. Insurance broker licensing and the broker-versus-agent distinction vary by state and affect liability analysis. ---
Encyclopedia Cross-Reference
Broker Fiduciary Duties — Loyalty, Disclosure, Confidentiality, and Dual Agency (The Law Mind Real Estate Transactions & Construction Encyclopedia) Broker Liability — Negligence, Misrepresentation, and Failure to Disclose (The Law Mind Real Estate Transactions & Construction Encyclopedia) Special Topics — Regulation of Broker-Dealers (The Law Mind Business Organizations & Corporate Law Encyclopedia) ---
Related Terms
Agent; Principal; Dual Agency; Fiduciary Duty; Broker-Dealer; Real Estate Agent; Commission; Factor; Dealer; Listing Agreement; Undisclosed Principal; Agency
BROKERSmain
Bouvier's Law Dictionary • 1928
Those who are engaged for others in the negotiation of contracts relative to property, with the custody of which they have no concern. Paley, Agency 13. See Comyns, Dig. Merchant, C. See BROKER. A broker is, for some purposes, treated as the agent of both parties; but, in the first place, he is deerned the agent only of the person by whom he is originally employed, and does not become the agent other the bargain or contract has definitely settled, as to the terms, between the prin- cipals, when he becomes the agent of both parties for the purpose of executing the bought and sold notes; Paley, Ag, Lloyd ed. 171, note p.; 1 Y. & J. 887; 18 Metc. 868; Whart. Ag. § 715: 71 Pa. 00; 5 B. & Ald. 388; 27 Me. 869; 3; 38 Wis. 668; 82 La. Ann. 210. A commission merchant differs from a broker in that he may buy and sell in his own name without disclosing his principal, while the broker can only buy or sell in the name of his principal. A commis- sion merchant has a lien upon the goods for his charges, advances, and commissions, while the broker has no control of the property and is only responsible for bad faith; 88 Fed. Rep. 685. Bill and Note Brokers negotiate the pur- chase and sale of bills of exchange and promissory notes. They are paid a commission by the seller of the securities; and it is not their custom to disclose the names of their principals. There is an implied war- ranty that what they sell is what they represent it to be and should bill or note sold by them turn out to be a forgery, they are held to be responsible; but it would appear that.by showing a payment over to their principals, or other special circum- stances attending the transaction proving that it would be inequitable to hold them responsible, they will be discharged; Edw. Fact. & Bro. $10; 5 R. 1. $18; contra, 29 Me. 494; 4 Duer 79. Exchange Brokers negotiate bills of ex- change drawn on foreign countries, or on other places in this country. It is sometimes part of the business of exchange brokers to buy and sell uncurrent bank notes and gold and silver coins, as well as drafts and checks drawn or payable in other cities; although, as they do this at their own risk and for their own profit, it is difficult to see the reason for calling them brokers. The term is often thus erroneously applied to all persons doing a money business. Insurance Brokers procure insurance, and negotiate between insurers and insured. Merchandise Brokers negotiate the sale of merchandise without having possession or control of it, as factors have. Pawnbrokers lend money in small sums, on the security of personal property, generally at usurious rates of interest. They are licensed by the authorities, and excepted from the operation of the usury laws. Real Estate Brokers. Agents employed to buy or sell real estate, to negotiate ex- changes thereof, to procure leases, options and loans are usually termed brokers. Mechem on Ag. Sec. 934, cited by Walker, Real Est. Agen. 4. One who is engaged for others on a commission to negotiate contracts relative to property, with the custody of which he has no concern. 110 III. 186, cited by id. A salaried agent, not acting for a fee or commission, is not a broker. 99 P. 657, cited by id. Ship Brokers negotiate the purchase and sale of ships, and the business of freighting vessels. Like other brokers, they receive a commission from the seller only. Stock Brokers. Those employed to buy and sell shares of stocks in incorporated companies, and the indebtedness of gov- ernments. In the larger cities, the stock brokers are asso- ciated together under the name of the Board of Brokers. See STOCK EXCHANGE. This Board is an association admission to membership in which is guarded with jealous care. Membership is for- feited for default in carrying out contracts, and rules are prescribed for the conduct of the business, which are enforced on all members. The purchases and sales are made at sessions of the Board, and are all officially recorded and published by an officer of the association. Stock brokers charge commis- sion to both the buyers and sellers of stocks. See Story, Ag. § 28; Malynes, Lex Merc. 143; Liverm. Ag. Chit. Com. Law; Whart. Ag.; Benj. Sales; Lewis, Stock Exchange; Bid. Stock Brokers; Mechem, Ag.
brokersnoun
Wiktionary (English) • 2026
Wiktionary contributorsCC BY-SA 4.0 • via Kaikki
Extracted and formatted for display by Law Mind. Source link opens the current Wiktionary page and its contributor history; it is not a frozen copy of this extract.
plural of broker
Brokersname
Wiktionary (English) • 2026
Wiktionary contributorsCC BY-SA 4.0 • via Kaikki
Extracted and formatted for display by Law Mind. Source link opens the current Wiktionary page and its contributor history; it is not a frozen copy of this extract.
plural of Broker
brokersverb
Wiktionary (English) • 2026
Wiktionary contributorsCC BY-SA 4.0 • via Kaikki
Extracted and formatted for display by Law Mind. Source link opens the current Wiktionary page and its contributor history; it is not a frozen copy of this extract.
third-person singular simple present indicative of broker

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