When Was The Last Time You Sent A Letter Via Telegram?

Telegram (PD)
I have never sent a telegram and would not know how to send one even if I wanted to. But, if you are so inclined, there is a somewhat quirky provision of New Jersey real estate law that would allow you to dust off your telegram machine and send one. This provision was the subject of a recent Appellate Division decision, Conley v. Guerrero, that attracted significant attention from the real estate community and may end up before the New Jersey Supreme Court. 

Anyone who has bought or sold real estate in New Jersey is familiar with "attorney review." When you buy or sell a house, you sign a contract that is almost always prepared by a broker. The contract must contain a standard provision stating that the buyer and seller have the right to have an attorney review the contract. This "attorney review" period lasts three days. The contract becomes legally binding if, at the end of that three-day period, neither the buyer's nor the seller's attorney disapproves of the contract. If either side disapproves, their attorney must notify the other side's broker by "certified mail, telegram or by delivering it personally." The attorney must also notify the other attorney (or the party itself if they are not represented), but the law does not specify the manner in which this notice must be delivered. (Stay tuned for more on this later!)

In Conley, plaintiffs signed a form contract to purchase a condominium unit from sellers. It contained the standard "attorney review" provision. After signing the contract, but during the attorney review period, sellers received competing offers to purchase the property and eventually entered into a new contract to sell it to a new buyer for a higher price. Sellers' attorney therefore sent a disapproval of plaintiffs' contract to both plaintiffs' counsel and the broker (who was a duel agent represented both plaintiffs and seller). He sent the notice of disapproval via email, which plaintiffs' counsel and the agent acknowledged receiving within the attorney review period. Nonetheless, plaintiffs argued that the notice was ineffective because it was not sent in the proscribed manner — by certified mail, telegram, or hand delivery.

Plaintiffs sued, seeking specific performance. Both sides moved for summary judgment. The Chancery Division granted defendants' motion and dismissed the complaint. The Chancery Division held that, while seller did not comply with the method-of-delivery requirements set forth in the contract, this breach was only "minor" because plaintiffs' counsel acknowledged receiving the notice within the attorney review period. Therefore, the Chancery Division held that the "underlying justification for the attorney review clause" — to protect parties against being bound by broker-prepared contracts without the opportunity to review them with their attorneys — was accomplished.

Plaintiffs appealed, arguing that sellers should be required to strictly adhere to the methods of delivery set forth in the contract. Sellers argued that the notice they provided substantially complied with the contract and that actual notice was accomplished.The Appellate Division sided with sellers and affirmed the Chancery Division's decision.

The Appellate Division held that the contract only prescribed the method of delivery for the broker, not for plaintiffs or their counsel. "Any form of actual notice suffice[d] as pertains to [plaintiffs]." Thus, sellers' notice to plaintiffs' counsel, which plaintiffs' counsel acknowledged receiving, was sufficient. Because the broker, the party who could have complained about the method of delivery, did not complain about it, this effectively ended the Appellate Division's inquiry. Nonetheless, the Appellate Division held that even if plaintiffs could enforce the broker's right to notice by the prescribed methods of delivery, their claim would still fail because there was substantial compliance.  As the Appellate Division held: "Enforcement of the method-of-delivery provision here would result in a forfeiture of [sellers'] right to disapprove the contract. Given [sellers'] substantial compliance, that forfeiture should be avoided." Therefore, the Appellate Division affirmed the Chancery Division's decision and plaintiffs' complains remains dismissed.

Finally, the New Jersey Bar Association participated in the appeal as amicus curiae and urged the Appellate Division to "endorse a revision of the current standard language to recognize the advent of modern communication methods such as email and the asserted obsolescence of telegram." The Appellate Division declined this invitation, but left the door open for the Supreme Court to revisit the issue. The Appellate Division held that one of the benefits of the prescribed delivery methods was to "avoid or limit disputes and litigation over whether actual delivery was accomplished." If you send a letter by certified mail, you can prove that it was sent and delivered. If you send a telegram, you can, presumably although I have never sent one, do the same. If you hand deliver a letter you can offer testimony that it was hand delivered. According to the Appellate Division, "[w]hether email of facsimile can satisfy that apparent purpose, and under what conditions, we leave to others to address."

The "others" that the Appellate Division mentioned would be the Supreme Court, whose 1983 decision in New Jersey State Bar Association v. New Jersey Association of Realtor Boards created the attorney review provisions in the first place. We will have to wait and see whether plaintiffs appeal the Appellate Division decision and whether the Supreme Court agrees to hear the appeal.

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