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LLB Realty, L.L.C. v. Core Laboratories, LP

123 Fed.Appx. 490, 2005 WL 293642 (3rd Cir. 2005)

CONTRACTS; ENFORCEMENT—Where a buyer waits too long, in this case two and one half years, before alleging that a property owner was contractually obligated to sell certain property, it is unfair to force the putative seller to honor an agreement that wasn’t clearly agreed-to in the first place.

A buyer and a seller took part in preliminary negotiations for the purchase of a plot of commercial property. The initial agreement contained a sales price and a leaseback arrangement giving the seller the option to lease the property from the buyer for a period of up to ten years following the sale. The attorneys for the buyer and seller mailed draft agreements back and forth to each other, the last draft being finalized and sent by the buyer to the seller. One to two months after receiving the final draft agreement, the seller told the buyer that it was no longer interested in selling its property owing to business reasons. Additionally, the seller rejected the buyer’s demands for assurance that the seller intended to go ahead with the sale and leaseback of the property to the buyer.

Within the course of the following two-and-a-half years, the buyer never attempted to force the seller to sell its property, but the buyer’s broker did continually ask the seller about its continued desire to sell. Each time it was asked, the seller declined to sell, but in the end, informed the buyer that it was considering selling its property to another prospective buyer and, thus, gave the initial buyer the chance to make a new offer that would not include a leaseback. This last communication prompted the buyer to bring suit against the seller asking for damages and for specific performance of the original agreement between it and the seller. The buyer also filed a recorded notice in the property’s chain of title warning all people that the property was the subject of litigation. The lower court dismissed the buyer’s suit and ordered that the lis pendens be discharged.

The Appellate Division found that the lower court’s ruling was correct because the buyer had waited too long – two-and-a-half years – to bring suit against the seller, thus failing to demonstrate any eagerness to carry out the contract with the seller. Additionally, it would have been unfair to force the seller to adhere to an arrangement to which it had not agreed since such an arrangement would be oppressive.

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