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Ehlers v. Giddio

A-5891-02T2 (N.J. Super. App. Div. 2004) (Unpublished)

CONTRACTS; ATTORNEY REVIEW PERIOD—A letter, during the attorney review period, from one party’s attorney to the other’s merely suggesting changes to a residential real estate contract does not constitute a rejection of the contract.

A condominium purchase agreement allowed the buyer to cancel it within seven days after execution. Although this was designated to be an “attorney review period,” the parties acknowledged that the seller did not have the same right of cancellation. Five days after the agreement was executed, the buyer’s attorney faxed a letter to the seller’s attorney requesting amendments to the contract. Two days later, the seller cancelled the agreement “pursuant to the attorney review period.” In response, the buyer brought suit for specific performance.

The lower court found that the sole issue in dispute was whether the amendments faxed by the buyer’s attorney constituted a rejection of the existing contract unless or until the seller agreed to them or whether they provided the seller with the opportunity to cancel the contract. The lower court found that the buyer did not cancel the agreement, and since the seller had no right to cancel, specific performance was ordered.

The Appellate Division affirmed based on the specific language used in the fax. The buyer’s attorney used language, based on prior case law, which expressed a suggestion, but was not binding. The seller could have rejected the amendments and still expected the buyer to perform on the original contract, which they were willing to do. Consequently, the Court held that there was no basis for the seller’s cancellation of the contract.

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