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Indoe v. Dwyer

Decided: October 28, 1980.


Gaynor, J.s.c.


[176 NJSuper Page 595] These cross-motions for summary judgment involve primarily the scope and effect of an attorney approval clause in a contract for the purchase of real estate. A secondary question relates to the binding effect upon a husband of such a contract executed solely by the wife where the only evidence of the husband's

interest was a provision in the contract providing that the deed was to be taken in both names. The primary issue presented is one of first impression and, in our opinion, must be resolved by an interpretation which permits an unlimited application of the attorney approval provision in the contract.

The facts of the case are not in dispute. In August 1976 plaintiffs listed their home in Bernardsville for sale at a price of $235,000. The property was not sold and it was listed again in 1977 at the same price. In August 1977 defendant Christine Dwyer was shown the house by a realtor in the absence of plaintiffs. She returned the following weekend with her husband, defendant John Dwyer, for a further inspection. No offer was made because defendants determined they were not interested in purchasing the property.

The following February Mrs. Dwyer inquired of the realtor as to whether plaintiffs' home was still available for purchase. Being informed that it was, but that an offer was then being considered, Mrs. Dwyer contacted her husband, who was on a business trip, and obtained his approval to submit a bid for the property. Accordingly, an offer of $225,000 was submitted orally by Mrs. Dwyer to the realtor. Later that day a realtor's printed form of contract for the sale and purchase of real estate was prepared by the realtor and presented to Mrs. Dwyer for signature. Believing the document to be merely a "bid" and that if acceptable to plaintiffs a purchase contract would thereafter be prepared, with the assistance of counsel and which would include terms acceptable to her husband and their attorney, Mrs. Dwyer signed the agreement. That evening the contract was presented to plaintiffs and executed by them.

When a copy of the fully executed document was returned later the same evening to Mrs. Dwyer, she was informed that, contrary to her expectations, plaintiffs did not intend to include the wall-to-wall carpeting in the sale. She thereupon called her attorney who instructed her to deliver a copy of the agreement to him the following morning. Two or three days later Mr.

Dwyer returned from his trip and conferred with their attorney concerning the contract. Following this conference defendants' attorney notified plaintiffs and the relator that, as attorney for defendants and in accordance with the provisions of the agreement, he was withholding his approval of the contract, and accordingly defendants would not proceed with the transaction. It was indicated that such disapproval was not based upon the price or financing terms. Pretrial discovery disclosed that such notification was given because the carpeting was not included in the sale and there was no specification in the agreement as to what personal property was indicated; the concern of defendants as to the close proximity of the swimming pool to the kitchen doors; the lack of provisions for potability and septic system tests; the shortness of the time period for satisfaction of the mortgage contingency; the inadequacy of the agreement in that Mr. Dwyer was not a signatory thereto, and other intangible considerations.

As indicated, the form utilized by the realtor was the "Standard Form of Real Estate Contract Adopted by the New Jersey Association of Realtor Boards for Use by New Jersey Realtors." The property was described by reference to the municipal tax map, and the purchase price, deposit and mortgage amount were handwritten insertions. The type of deed to be delivered was specified as "C. vs. Grantor," and the rate of interest on the mortgage to be obtained by the purchaser was stated as "prevailing rate." The agreement contained typed contingency clauses for the obtaining of a $75,000 conventional mortgage within 20 days and a termite inspection within 7 days. No provision was made for the inclusion in the sale of any personal property, except for gas and electric fixtures, etc., if any, as provided by the printed language of the form. The agreement also contained the following typewritten provision, which is being relied upon by defendants in opposing plaintiffs' motion for summary judgment for breach of the contract and in support of their motion for a dismissal of the complaint:

This contract, except as to price and financing terms (if any), is contingent upon approval by the respective attorneys for purchasers and sellers within three (3) business days of the date hereof. The parties agree that such approval shall be deemed to have been given, and this contingency satisfied or waived, unless an objection or amendment or addition or other express statement withholding (sic) approval is made in writing within said three day period and delivered to the realtor or exchanged between the respective attorneys if they are known to each other.

Inasmuch as there does not exist any dispute concerning the material facts relating to the issues presented, it is appropriate that the motions of the parties be determined in a summary proceeding. R. 4:46-2; Judson v. Peoples Bank & Trust Co. of Westfield , 17 N.J. 67 (1954).

It is plaintiffs' contention that defendants breached the contract by their failure to consummate the purchase in accordance with the agreement and that their attorney's notification of disapproval was not sufficient to excuse them from such performance. They assert that the "attorney approval clause" in the contract does not permit disapproval for unspecified reasons nor for any of the reasons as disclosed by defendants' answers to interrogatories. Plaintiffs argue that it would be unreasonable to conclude otherwise because of the specific language precluding an objection based upon price or financing terms. Additionally, they contend that a reasonable interpretation of the clause would not support a claim that the parties intended carte blanche disapproval rights after entering into what purports on its face to be a legally binding contract. ...

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