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Gordon Development Group, Inc. v. Bradley

362 N.J. Super. 170, 827 A.2d 341 (App. Div. 2003)

CONTRACTS; ATTORNEY REVIEW—The attorney review period in a broker prepared contract starts and ends at the same time for both buyer and seller and is nothing more than a provision that allows for cancellation of the contract within a limited period of time under certain conditions.

Pursuant to a broker-prepared contract, a buyer and seller entered into a real estate transaction. The contract contained a standard attorney review clause. The seller signed the contract on September 26. It was delivered through the parties’ respective real estate agents on September 28. The following Monday, October 2, the seller’s attorney delivered a letter to the buyer disapproving the contract. The buyer thought the cancellation untimely and filed an action for specific performance.

The buyer “argued that the contract provided for two independent periods of review, one for the buyer and one for the seller.” Under that theory, it asserted that “the ‘seller’s period of attorney review’ commenced on September 26, the date the contract was signed by the seller.” It asserted that the seller had a fully-executed contract in his possession that had been delivered to him on September 26. The seller’s position was that there was only one attorney review period. The lower court agreed with the seller, as did the Appellate Division.

The Court reviewed the genesis of the attorney review requirement for broker-prepared contract and in particular “whether the period of review commences upon execution by the last party to sign the contract, or upon delivery of a fully-executed contract to all parties.” It quoted from the New Jersey Supreme Court’s opinion in the case that led to the three day attorney review period and in particular to the ruling that the period begins to run “from the date of delivery of the signed contract to the Buyer and Seller.” Even though the buyer cited a particular case for the proposition that would hold to the contrary, the Court, after reviewing that particular case, pointed out that the case in question did not address the mechanics of the triggering of the attorney review period. That was not the issue in the cited case. According to the Court, the language quoted by the buyer was “merely a shorthand description of the attorney review rationale.”

The Court rejected the buyer’s contention that there are two attorney review periods, stating that it was “not aware of any authority that supports this argument.” The buyer’s argument presumed “that the attorney review period is a prerequisite to entering into a contract, and that the contract comes into existence only upon the expiration of independent periods of review.” “This would mean that the attorney review clause is meaningless because it is obsolete the moment the parties enter into a contract.” In fact, “[t]he clause is nothing more than a provision that allows for cancellation of the contract for a limited period of time under certain conditions.


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