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Maccioli v. Lyon

A-4419-01T2 (N.J. Super. App. Div. 2003) (Unpublished)

CONTRACTS; CONTINGENCIES—Where a contract contingency is based on a buyer’s ability to build a house without specifying its minimum size, the ability to build any reasonable size house satisfies the contingency.

A buyer, intending to construct a house, contracted to purchase a property containing wetlands. During contract negotiation and during the attorney review period within the contract, the buyer was furnished with a Department of Environmental Protection (DEP) Letter of Interpretation (LOI) regarding the jurisdictional boundaries of the wetlands. The parties agreed that closing was conditioned upon the buyer “obtaining a current Letter of Interpretation from the DEP and that closing would occur within forty-five days of [the buyer’s] receipt of the letter.” If the LOI was not received within six months, the buyer could cancel the contract. Within the time limit, the DEP issued an updated LOI showing the wetlands and water boundary lines. The buyer then retained a civil engineering firm to determine whether a house could be built. “The engineers determined that the property could support a single-family dwelling with ‘a building footprint of approximately 35 Ft. x 65 Ft. [and that] [t]he structure would probably be limited to a front entry garage and no accessory structures (such as decks/ pool or cabana) would be allowed without an N.J.D.E.P. permit for a ‘Transition Area Reduction.’” Thereupon, the buyer’s counsel told the seller’s counsel that the buyer had been “guaranteed an acre (1) to an acre and a half (1 1/2) of buildable land.” The seller denied making such a guarantee and the buyer terminated the contract by letter, whereupon the seller served the buyer with a “time of the essence” notice.

The lower court could find no promise of any guaranteed home size. It did find a provision in the agreement specifically stating that no representations had been made by the parties except as set forth in the agreement. The Appellate Division found that the lower court’s responsibility was to “determine whether the terms of the agreement are clear and unambiguous.” Further, “it is well established ‘that a party to a contract is bound by the apparent intention he or she outwardly manifests to the other party. It is immaterial that he or she had a different, secret intention from that outwardly manifested.’” Here, the buyer was not only aware of the wetlands restrictions, “but he was provided with an updated Letter of Interpretation and a survey map of the wetlands boundary.” The buyer’s “assertion that he was somehow misled into believing he could construct a larger house with substantial amenities within the buildable limits of the property [was] simply not supported by the evidence.” The contract merely stated that the buyer intended to build a “single family dwelling.”

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