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D’Amore v. Sharbell Plainsboro, Inc.

A-2006-00T2 (N.J. Super. App. Div. 2002) (Unpublished)

CONTRACTS; DEVELOPERS— Where a contract clearly states that no oral promises to make changes to a house being built will be honored and where the contract has a merger clause, a buyer is not entitled to the modifications “promised” by a salesperson, but not included within the contract.

Buyers purchased a home to be constructed. When they first visited the site, no construction had taken place and they selected a model home from the developer’s sales brochure. The brochure contained a floor plan with the approximate square footage of the house written on the plan. The developer’s sales manager told the buyers that the developer had increased the size of the house by about 100 square feet by extending the second floor along the back line of the house. The sales manager drew an “X” through the square footage and noted the new, higher square footage on the brochure. The brochure also listed certain other features, such as specific appliances, and a particular grade of windows. Important to this matter, however, was that the brochure stated that the developer reserved the right to change “our standard and upgraded features, without notice and obligation” and also that the developer reserved “the right to make modifications in design and products without notice or obligation.” About three months after visiting with the sales manager, the buyers entered into a contract which provided that the house to be built would be substantially similar to the model shown in the sales brochure. The contract reserved the right for the builder to make substitutions and small changes, including for the appliances. It also expressly stated “that no one is authorized by Seller to make any commitments or alterations or variations, unless agreed to in writing by Seller… .” It also contained a merger clause stating that the sales agreement was the entire contract between the seller and the buyers. The buyers had an attorney review the contract and went forward with the purchase. About two weeks after executing the contract, they received a letter from the developer “clarifying” that there would be no changes to the second floor and that the house would have the approximate square footage originally stated in the sale brochure. The buyers’ attorney responded by demanding that either the house be restored to its larger size or a price adjustment be made. Neither happened, but the buyers proceeded with the closing anyway. After closing, the buyers sued the builder, alleging damages arising out its failure to build the house with the larger floor area and with respect to substitutions of an appliance and the featured windows. About fifteen months after the closing, the buyers resold the house for a profit. At trial, the buyers acknowledged that they had never measured the space and they did not present any evidence as to their measure of damages. Instead, the buyers argued “that such testimony was not necessary and that [they] suffered ‘common sense’ damages from the deviations from the sales brochure.” They argued that a jury could “figure out on their own ... what the value of those things are.” The lower court dismissed the action, noting that the buyers failed to prove the element of damages. The Appellate Division agreed. Further, the Appellate Division held that the builder had never represented that the home would be exactly like the brochure. It pointed to the contract language that the home would be “substantially similar” to the model shown in the sales brochure. It also pointed to a disclaimer which stated that “all dimensions are approximate and subject to variation.” The Court found that the “disclaimer was obvious, conspicuous and not buried in other sales literature.” More importantly, the Court pointed to the provision that no one was authorized by the seller to make any commitments for alterations or variations. Between the two provisions, the consumer was out of luck on all counts.

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