On appeal from the Superior Court, Law Division, Union County.
R.s. Cohen, Arnold M. Stein and Kestin. The opinion of the court was delivered by R.s. Cohen, J.A.D.
This is an action for damages by a contract seller of a home against the contract buyer and the real estate broker. The action against the broker was settled, and the seller prevailed against the buyer. We affirm in part and reverse in part.
The seller owned a home in Mountainside. She and the buyer executed a contract of sale for $290,000. The broker's contract contained two provisions of significance to this action. The first was a mortgage contingency clause which gave either party the right to void the contract if the mortgage loan
described in the contract -- $90,000 on the $290,000 purchase price -- had not been "arranged," or the contingency was not waived by the buyer, within 45 days. The other provision was a representation by the buyer ". . . that he has sufficient cash available (together with the mortgage or mortgages referred to in Section 3) to complete this purchase."
The buyer was a physician who practiced with his uncle. He had received assurances from his uncle of a loan of $200,000 in order to finance the home purchase. Before the contract was fully executed, however, the uncle offered to lend the buyer $289,000, the entire purchase price less the initial $1,000 deposit. As a result, the buyer did not apply for the $90,000 mortgage mentioned in the contract.
The seller was told about the change in the buyer's financing plans when she signed the contract. She understood that the buyer would get all of the money from his uncle and that the $90,000 mortgage contingency was therefore waived by the buyer. The buyer took the position at trial and before us that the seller orally agreed to a substitution of an "uncle contingency" for the written mortgage contingency.
Shortly after the contract was executed, the uncle was examined by a cardiologist, who found his coronary arteries to be dangerously clogged. As a result, the uncle immediately had triple bypass surgery. After the operation, he told the buyer that his economic future was now uncertain, and that therefore it was impossible for him to finance the house purchase. The buyer immediately applied for a $232,000 institutional mortgage, but was turned down for lack of sufficient income and cash to close. He then informally applied to a mortgage company, which advised him by telephone that he was not qualified for such a large mortgage.
Meanwhile, the seller, who did not know of the buyer's problem, committed herself to buy a house in Vermont, and accepted employment there as well. The buyer asked for a postponement of the agreed closing date to give him time to
solve his financial dilemma. The seller turned him down and made time of the essence for a closing twelve days later. The buyer was unable ...