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Singh v. South Brunswick Plaza, L.P.

A-4633-06T2 (N.J. Super. App. Div. 2008) (Unpublished)

CONTRACTS; RIGHT OF FIRST REFUSAL — Where a prospective buyer makes successive offers, each one of which is a substantial variation from its previous offer, each will trigger a right of first refusal if such a right is contained in a lease or other agreement.

A prospective purchaser of a gas station objected and filed suit when the owner and landlord of the gas station sold the station to the gas station’s tenant pursuant to a right of first refusal in the lease between the parties. The prospective purchaser had made four offers to purchase. Notice of each had been duly conveyed by the seller to its tenant by certified mail pursuant to the lease agreement. The second offer increased the originally offered purchase price; the third offered to pay an additional brokerage commission; and the fourth offered to cap the amount of the seller’s attorneys’ fees. The tenant, after the fourth offer, gave notice to its landlord that it elected to match that offer and buy the property. The prospective purchaser sued, requesting specific performance of a contract. The lower court granted summary judgment to the seller and its tenant. The prospective purchaser appealed.

On appeal, the Appellate Division affirmed the lower court’s ruling, finding that all four offers were based upon submissions of varying material terms to a contemplated signed contract and none were simply a “tweaking” of terms as suggested by the prospective purchaser. As such, the Court found that, under the lease agreement, the tenant’s right of first refusal was triggered each time the prospective purchaser made a new offer and the landlord dutifully conveyed each such offer to its tenant. It also found the tenant had timely exercised its right under the lease (within twenty days) after the fourth offer was conveyed. The Court also observed that the prospective purchaser had submitted no affidavit, no deposition testimony, nor any other proof which would indicate that the tenant’s letter that exercised its right was not in response to the letter from the seller advising the tenant of the fourth offer.

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