Skip to main content



Peterson v. Estate of Pursell

339 N.J. Super. 268, 771 A.2d 666 (App. Div. 2001)

CONTRACTS; BROKERS—A real estate broker is not an agent of the seller for the purpose of determining when a executed contract is delivered to the seller for the purpose of beginning the three-day attorney review period.

The executor of an estate entered into a listing agreement with a real estate broker for the sale of an estate-owned property. The broker found a prospective buyer and drafted a sales contract. The broker sent the contract to the seller and the seller signed the contract and returned it to the broker. The broker then delivered the contract to the buyer with instructions that the buyer return the executed contract to the broker instead of to the seller’s counsel. The buyer executed the contract on a Tuesday and faxed it back to the broker the same day. However, the broker had left the office for the day and did not transmit the fully executed contract to the seller’s counsel until Wednesday. Over the following weekend, a different prospective buyer made a better offer on the house. The next Monday, the seller’s counsel cancelled the contract between the seller and the initial prospective buyer. That buyer sued, seeking specific performance arguing that delivery of the signed contract to the broker on Tuesday started the running of the attorney review clock, and that the attorney review period therefore expired on Friday. The lower court rejected the buyer’s argument and held instead that the attorney review period begins to run when a fully executed contract is delivered to a party. It also held that the seller’s counsel’s rejection of the contract was timely. The lower court recognized that when calculating the three-day period for attorney review, the date of delivery is not counted nor are weekends. Therefore, because seller’s counsel did not receive the fully executed contract until Wednesday, the review period began at start of business on Thursday morning and ended at close of business on Monday evening. On appeal, the buyer argued that the three-day period begins to run on the date that a fully executed contract is delivered to the broker on the theory that the broker is the agent of the seller. The Appellate Division rejected this argument and instead based its decision on the directives of New Jersey State Bar Ass’n v. New Jersey Ass’n of Realtor Bds. (1983), the New Jersey Real Estate Commission’s regulations, and public policy considerations which mandate that “the attorney review period begins to run when a conforming contract is delivered to a party.” On this basis, the Court held that “delivery of the signed agreement to [the broker’s] office did not start the attorney review period. Because the contract was never delivered to [the seller], the review period never commenced.” Although the Court did not delve into the issue of whether delivery of a fully executed contract to the seller’s counsel would begin the three-day attorney review period, it concluded that if it would, the attorney review period would have run from Thursday morning through Monday’s close of business. Therefore, seller’s counsel’s rejection of the contract was nonetheless timely.


MEISLIK & MEISLIK
66 Park Street • Montclair, New Jersey 07042
tel: 973-783-3000 • fax: 973-744-5757 • info@meislik.com