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Takacs v. Old Bridge Land Development Co., Inc.

A-3611-01T1 (N.J. Super. App. Div. 2003) (Unpublished)

CONTRACTS; CONTINGENCIES—Even if failure of a contingency results from a lack of diligence on the part of a seller, once a buyer acquiesces in the failure, specific performance, as an equitable remedy, is not an available remedy.

A property owner entered into a contract to sell a portion of its property. The contract contained a subdivision contingency saying that if the property owner was unable to subdivide its property to produce the lot to be sold, the contract would be terminated. The owner submitted the application for approval. When it became apparent that the municipality would not approve a subdivision for the size of the lot it intended to sell, it withdrew its application. Years later, the property owner sold its entire property, including the portion it previously contracted to sell. The first buyer sued for specific performance. The lower court rejected the buyer’s claim. It noted that the contract contained a contingency that did not require the owner to sell unless it obtained subdivision approval. Once it became clear that it would not receive its approval and it withdrew the application, the contract was terminated. The lower court also noted that specific performance is an equitable remedy and specific enforcement of a contract is based on the circumstances. It found that since the owner failed to obtain subdivision approval, and the first buyer acquiesced in the failure of the contingency, it was inappropriate to require the owner to sell to the first buyer. Further, the first buyer’s claims were barred by laches. The first buyer’s delay in seeking to enforce the contract was inexcusable, unexplainable, and prejudiced the right of the property owner to sell the property and the right of the subsequent buyer to purchase it. The first buyer knew that the subdivision application was withdrawn seven years earlier and should have sued to enforce its contract claim at that time. The Appellate Division affirmed.

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