In New Jersey, You Can Now Disapprove A Real Estate Contract By Email Or Fax (But Not Telegram)

     by:  Peter J. Gallagher (@pjsgallagher) (LinkedIn)

Telepgraph (pd)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 personal service. In Conley v. Guerrero, a case that seems to be a case study in the concept of raising form over substance, the New Jersey Supreme Court updated this requirement to allow the notice of disapproval to also be sent by fax or email. (Those of you still using telegrams may be out of luck, however, because this no longer appears to be an appropriate method of service for the notice of disapproval.) 

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 sent a disapproval of plaintiffs' contract to both plaintiffs' counsel and the broker (who was a duel agent represented both plaintiffs and seller) during the attorney-review period. He sent the notice via email, which plaintiffs' counsel and the agent acknowledged receiving within the attorney review period. Nonetheless, plaintiffs claimed that the sellers were bound by the contract and had to sell to his clients because the disapproval 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.

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In Honor Of National Hot Dog Day . . .

Hot dog stand
For those of you who don't know (like me until a few minutes ago, thank you Twitter), today is national hot dog day. In my efforts to try to be relevant, I thought I would post something about hot dogs and the law. A Westlaw search of "hot dog" in the New Jersey database yields 51 results. Most of these cases are not terribly interesting, but one caught my eye for extolling the virtues of "peddlers" selling hot dogs on the street (known to many as "dirty water dogs").

In Brown v. City of Newark, 113 N.J. 565 (1989), the New Jersey Supreme Court was faced with the question of whether Newark's municipal peddling ordinance was constitutional. A "peddler" was defined by Newark as: "any person commonly referred to either as a peddler or hawker, who goes from place to place or from house to house by traveling on the streets and carries with him goods, wares and merchandise for the purpose of selling or delivering them to consumers . . . ." The Supreme Court noted that peddling was a legitimate occupation, but was subject to reasonable regulation. The ordinance at issue in Brown, among other things, required: (1) that peddlers move unless they were making a sale; (2) required that peddlers avoid creating nuisances; and (3) restricted the size and location of peddlers' carts. A group of peddlers challenged the ordinance. The trial court  ruled in their favor. The Appellate Division affirmed (mostly) as did the Supreme Court.

Of particular concern for us on national hot dog day, however, was the court's musing about the sale of hot dogs by peddlers:

The problem is that the municipal regulator is squeezed at both ends of the spectrum. Generally a municipality is forbidden to set aside a portion of its streets as a marketplace where space may be used by peddlers for the sale of merchandise. Even the peddler's license afforded by statutory grace to any veteran . . . does not carry with it a license to sell “refreshments or merchandise at a fixed stand.” The best that a municipality can do is oversee an uneasy alliance between competing peddlers, consumers, and the demands of the public in maintaining fixed zoning boundaries. This is no easy burden, as the “hot dog wars” of Atlantic City attest. 
Part of the reason for the regulatory stalemate is the ambivalence that we feel toward street peddlers. Many of us retain images of peddlers-past who enhanced our neighborhoods. Others enjoy the ambiance of a hot dog alfresco or savor chestnuts roasting on an urban street. Those are the pleasant aspects of peddling. The unpleasant part is that we have a sense as a community that we do not want trays of sausages and costume jewelry camped outside of our best retail stores. The problem thus requires maintaining a delicate balance between the nostalgic aspects of peddling and the intrusive aspects.
I, for one, enjoy hot dogs, al fresco and otherwise, but I am not sure I have ever thought of a dirty-water-dog, or the stand from which I purchased it, as creating "ambiance." Regardless, happy national hot dog day.