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Ferrigno v. Mollica

A-4143-03T2 (N.J. Super. App. Div. 2006) (Unpublished)

CONTRACTS; NOTICES — Where one party to a property sales contract requires the other party to put all correspondence in writing, an oral attempt by the first party to cancel a contract is ineffective because it, too, must be in writing.

After entering into a contract to sell her home, an elderly and infirm homeowner, who was dependent on daily visits from friends and family, tried to revoke the contract by orally communicating her intent to the buyer. The homeowner had earlier insisted that all correspondence concerning the contract be in writing. After the homeowner refused to close, the buyer instituted suit seeking specific performance. The homeowner responded by claiming no valid contract existed because of her oral revocation. The lower court as well as the Appellate Division held that the attempted revocation was ineffective because the seller had earlier required her buyer to put all correspondence in writing. Therefore, any attempt to cancel the contract should have been in writing.

Specific performance is an equitable remedy left to the discretion of a court and does not automatically follow a conclusion that a contract for the sale of real estate has been breached. Appellate courts can reverse equitable rulings based on a lower court’s discretionary judgment where the Appellate Court finds abuse of that discretion. In this case, the Appellate Division found that the lower court judge specifically considered and carefully weighed the effect specific performance would have on the parties. The Court found no abuse of discretion by the lower court in ruling that specific performance was too harsh a remedy in this case. The buyer also claimed the lower court erred in its valuation of damages. Apparently, the buyer was a straw man who was to transfer the property to a third party for purposes of enlarging its business operations. The third party was a complete stranger to the sale and was not a party to the litigation. The seller was unaware that the sale was intended to benefit a third party. Consequently, it would have been inappropriate to include, in the damages award, any amount claimed by the third party as compensation for any negative effect the loss of the property had on its business.


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