Monday, July 28, 2014

Return of down-payment on contract for sale of real property.

Practice point:  To prevail on the cause of action, the plaintiff must establish that the defendant breached or repudiated the contract and that the plaintiff was ready, willing, and able to perform on the closing date. The rule is that, where the vendor's title is incurably defective, a vendee can recover the money paid on the contract from a defaulting vendor, without a showing of tender or even of willingness and ability to perform, but a tender and demand are required to put the vendor in default where title could be cleared without difficulty in a reasonable time. In that latter situation, the seller is entitled to a reasonable time to make the title good. When the vendor is on notice of the defect prior to the scheduled closing date and does nothing to correct it until after the closing date, the purchaser need not tender performance,  as such tender would be meaningless.

Student note:  Where a seller seeks to hold a purchaser in breach of contract, the seller must establish that he or she  was ready, willing, and able to perform on the time-of-the-essence closing date, and that the purchaser failed to demonstrate a lawful excuse for its failure to close.

Case:  Martocci v. Schneider, NY Slip Op 05308 (2d Dept. 2014)

Here is the decision.

Tomorrow's issue: Denial of a motion to dismiss on a general release and waiver.