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Pazzani v. Spring Street Development Urban Renewal, LLC

A-1004-07T1 (N.J. Super. App. Div. 2009) (Unpublished)

CONTRACTS; WAIVERS — The actions of one party to a contract may indicate an acquiescing to an extended closing date and override the contract’s provision that a closing date may only be extended by written amendment.

Two buyers entered into a purchase agreement with a property owner for the purchase of a condominium that was to be built as part of a mixed use building. After the construction began, the buyers requested additional modifications to the unit. This required rescheduling the closing date so that a certificate of occupancy could be issued. Three days prior to the closing, the buyers sent notice to their seller that they were terminating the agreement in accordance with a provision in the contract that allowed them to terminate the agreement as a result of the seller’s delay. The buyers then sued for the return of their deposit. The seller filed a counterclaim for breach of contract and of the implied covenant of good faith and fair dealing. The lower court, on summary judgment, entered a judgment in favor of the buyers awarding them $133,000, and dismissed the seller’s counterclaim. The lower court’s decision was based on the fact that the property owner did not obtain a written amendment to extend the closing date by four days. Therefore, according to the court, the agreement expired prior to the final date set for closing.

On appeal, the Appellate Division held out that there was no indication or expressed objection by the buyers to the extended closing date requested by the seller and that they had not presented any evidence of harm caused by the closing date extension. It also found that the delay in the final closing date in part resulted from the modifications requested by the buyers and as a result, factual issues existed. The Court further found that another factual issue existed over whether the buyers had acquiesced to the extended closing date by their silence and whether the conduct of the buyers induced reliance on the part of the seller to its detriment. Based on its findings, it reversed the lower court’s decision and remanded the matter for a trial on the buyers’ claims and on the seller’s counterclaims.

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