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Benya v. Slous

A-2456-01T3 (N.J. Super. App. Div. 2003) (Unpublished)

BROKERS—A party to a residential contract has no claim for interference against a broker just because the broker induces the other party to have its attorney cancel the contract within the three day attorney review period.

Home buyers enlisted a real estate agent to find them a suitable house. The agent showed a property that was not listed for sale with a real estate broker at that time. The parties entered into a broker-prepared contract with a three-day attorney review provision. A second real estate broker lived next door to the house being sold and learned of the sale. Before the end of the three-day period, she presented the seller with a higher offer and the seller’s attorney rejected the first contract. In response, the original buyer matched the offer and offered improved terms. The seller’s attorney then rejected the second contract, and the seller entered into a new contract with the original buyers. Even though the original buyers wound up with the house, they sued the second broker alleging tortious interference with the initial contract. They argued that the New Jersey Supreme Court “never intended that the attorney review clause should become a vehicle permitting sellers to continue to consider or to accept offers for a better price during the three-day review period. In that regard, they argue[d] that the actions of [the second real estate broker] in presenting buyers to [the seller], who offered a higher price, was tortious interference with” their contractual rights. The Court rejected that argument, holding that “[i]n effect, the [claimants] asked us to ignore twenty years of precedent in both our court and in the Chancery Division, which runs counter to the arguments they present.” The line of cases referred to were those that held the attorney review clause “permitted attorney disapproval for any reason, that there was no need to explain the reason, and the courts were not expected to review the disapprovals for reasonability.” One case had specifically found that “though [the parties] had signed realtor contracts, sellers and buyers were free to make other deals during the review period.” It also pointed to a case that set aside a Real Estate Commission regulation that required an Agreement to Honor to be included in agreements of sales in which the attorney review clause was required. Such a requirement would have forbidden the sellers from continuing to show their property and obligate them “not to consider other offers during the three-day attorney review period.” In setting aside that Commission’s regulation, the Court, in that matter, held that the “commissioner violate[d] the Court approved consent judgment and intrude[d] on our Supreme Court’s constitutional power.” As a result, the Court found that the tortious interference claim was derivative in that it stood or fell on the claimant’s right to enforce the contract in the first place. According to the Court, because the buyer, in this case, “had no right to enforce the contract for the sale of the property, [its] tortious interference claim was property dismissed.”


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