A Modern Day Twist to the Three Day Attorney Review Clause

Has New Jersey real estate law finally entered the 21st century, allowing lawyers to email or fax termination letters within the three day attorney review period, putting the final nail in the coffin of certified mail, hand delivery and that most archaic of methods, the telegram? Well, no. However, the Appellate Division, in the case of Conley v. Guerrero, Docket No. A-37696-13T2 (11/5/15) has recognized that actual notice to a party, coupled with substantial compliance with the intent of the delivery clause, can be enough to effectuate termination of a contract.

In the Conley case, the seller’s lawyer sent a termination notice within the three day attorney review period to both the buyers’ lawyer and buyers’ realtor, via fax and email.  The contract contained the typical delivery clause requiring certified mail, hand delivery, or telegram. The buyers did not dispute that they received actual notice of the termination within the three day period, and admit that they had counsel to represent them during this period.  However, buyers challenged the termination, arguing that the seller’s compliance with the spirit of the contract was insufficient to terminate the contract, and sought an order from the court compelling the seller to sell them the house.

The Appellate Division held that, because the buyers received actual notice, and because the seller substantially complied with the intent of the contract, in that both parties had engaged attorneys to review the contract, the buyers could not use the seller’s technical failure to compel specific performance from the seller.  In a court of equity, where strict compliance with the letter of the law is not always necessary, the email and fax delivery to buyers’ attorney was deemed, essentially, “good enough.”

But don’t throw out your certified mail cards just yet. The court declined the New Jersey Bar Association’s invitation to embrace modern communication methods such as email and reject the obsolete telegram.  The court specifically stated that it “does not intend to establish a general rule that delivery to the realtor by email satisfie[s] the prescribed method of delivery.”  So while in this particular instance, the facts supported the court’s finding that the buyers’ receipt of actual notice was sufficient, that may not be the case in every situation.

Until there is a clear cut ruling by the court, continue to send those termination letters out by certified mail.  You can, of course, continue to fax and email the letters simultaneously with the certified letter, to ensure prompt receipt.  But perhaps this ruling is one more baby step towards doing away with the telegram once and for all.

If you have questions regarding your real estate transactions, the experienced real estate lawyers at Posternock Apell, PC can help. Contact us today for a free phone consultation and to support your clients.