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Tiedemann v. Cozine

297 N.J. Super. 579, 688 A.2d 1056 (App. Div. 1997)

CONTRACTS; STATUTE OF FRAUDS—When the modification does not affect a time of the essence provision, the Statute of Frauds does not bar an oral modification to extend the time for performance in a contract that is otherwise required to be in writing.

A contract of sale for a vacant lot contained a contingency that would allow the buyer to terminate the contract if a building permit was not obtained by August 1, 1995. The contract contained no express time of the essence clause, but did contain a provision that neither buyer nor seller was required to apply for a variance in the event that the municipality required one. When the buyer came to believe that a variance would be necessary, the buyer’s attorney requested that the contingency date be extended until September 1, 1995. The seller’s attorney verbally agreed, but the changes were never reduced to a signed writing. Thereafter, the buyer sought to cancel the contract on the ground that the municipality required a variance to build. The seller, however, proceeded to apply for the variance and on August 1, 1995 it was advised that the municipality did not in fact require a variance. On August 2, the buyer sought to cancel the contract on the ground that the building permit had not been obtained by August 1, 1995. The buyer contended that the Statute of Frauds barred an oral extension of the contingency date, or, in the alternative, that the oral agreement did more than merely extend the time for performance. The buyer contended that the agreement also imposed additional burdens upon it.

The Appellate Court ruled that all agreements extending the time for performance of contracts that fall within the Statue of Frauds are valid. Its rationale was that the Statute of Frauds requires the contract to be in writing, but that performance of the contract is not within the Statute. Also, if a burden was imposed on either party, it was imposed on the seller and not on the buyer. Therefore, the oral agreement did not violate the Statute of Frauds by requiring different performance on the part of a complaining party. Based on this analysis, the Court concluded that summary judgment in favor of the buyer was inappropriate, and that the trial court should determine, as an issue of fact, the intent of the parties in extending the contingency date. Subsequent to this decision, the New Jersey Statute of Frauds, N.J.S. 25:1-5 was repealed and replaced with N.J.S. 25:1-11.,


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