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Great Notch Quarry Associates Limited Partnership v. Goodmar Realty Co., Inc.

A-893-97T1 (N.J. Super. App. Div. 1999) (Unpublished)

CONTRACTS; STATUTE OF FRAUDS; ESTOPPEL—The doctrine of promissory estoppel can properly be evoked to uphold and enforce a party’s promise even if the Statute of Frauds would otherwise operate to render it void.

A landowner contracted to sell vacant land to a buyer that intended to develop attached homes. The contract acknowledged that the project required either that the property be re-zoned or that a variance be obtained. It also provided that “the Seller will make the application for the approvals which the Buyer requires and which ... are a condition for the sale and the closing.” The buyer’s obligation to close title was contingent upon “the granting of all the necessary governmental approvals for the development… .” Of particular note was that the contract didn’t contain an integration clause which would have made the written contract into the final expression of the parties’ agreement and would have barred oral modification of its terms. In accordance with the contract, the seller proceeded to obtain site plan approvals, but as time went by, the buyer came to believe that the property contained wetlands. After hearing testimony, the lower court judge found that the buyer affirmatively told the seller that it would deal with the issue of wetlands and would get all the necessary approvals. Based upon this, the lower court concluded that the buyer had “waived the contractual obligation of [the Seller] to obtain all approvals or, in the alternative, are [sic] equitably estopped from denying waiver.” Having reached this conclusion, the lower court ruled that when the buyer refused to close after having taken upon itself the responsibility to obtain all necessary approvals, the buyer had breached its contract. On appeal, the Court felt the need to determine whether the buyer’s promise to deal with the wetlands problem was enforceable. In the Court’s view, the lower court apparently assumed that the buyer’s oral promises were enforceable despite the existence of the written contract for sale of real property and the lower court treated the problem as one of the buyer’s waiver of the contractual provision that required the seller to obtain all governmental approvals. The Court found that this posed a problem in that if the buyer’s promise to assume responsibility for what were clearly contractual obligations of the seller was not enforceable, than the promise could not be deemed to have effected a waiver of the buyer’s right to hold the seller to the terms of the written contract. In analyzing the lower court’s holding that the buyer’s promises were enforceable, the Court noted the lack of an integration clause in the contract. Therefore the contract itself contained no impediment to enforcement of ancillary or supplemental oral agreements between the parties. Consequently, the “doctrine of promissory estoppel can properly be evoked to uphold and enforce [the Buyer’s] pledge to obtain the necessary wetlands development approvals, even though the Statute of Frauds would otherwise operate to render it void.” It held that the buyer “made a clear and definite promise to assume responsibility. ,” and the buyer certainly expected that the seller would rely on that promise. It was reasonable for the seller to rely on the promise and, by reason of such reliance, it suffered a definite substantial detriment which, by virtue of the buyer’s breach of the oral agreement or by virtue of the buyer’s failure to keep its promise, the seller was entitled to retain the deposit as agreed-upon damages caused by the buyer’s failure to close title to the property.


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