In the world of law, the language of statutes and contracts does not always change with the times. Newer concepts and changes in technology may not be reflected in our laws or agreements, which can cause legal problems when things go sour.
Such is or was the case with standard language in New Jersey real estate contracts, in a dispute that was resolved by the new Jersey Supreme Court last year.
Attorney Review Period
The case revolved around what is known as the attorney review period written into real estate contracts. This is a three day period that parties have after a real estate contract is signed, to have an attorney review it.
The law exists because most real estate contracts are negotiated and signed between buyers and sellers and their real estate agents or brokers. Usually, the lawyer is not involved that early, so the law provides a time window for people to bring the contract to an attorney for review before being bound by it.
If the party wants to, within that three-day period, he or she can reject the contract by sending notice by “certified mail, telegram, or personal service.” As you may guess by just looking at that language, there is no fax or email, and nobody uses telegrams very much anymore. The language of the contract has not kept up with the times.
Dispute Over Contract Cancellation
In a case last year that the New Jersey Supreme Court decided, a party (the seller) had rejected the contract within the time period by having a lawyer send an email to the buyer–a process (using email) not written into the exact language of the statute.
The buyer sued to compel the property to be sold to him, saying that email is not written into the statute as a means to convey cancellation notices, and thus the contract was not properly rejected during the review period, making it binding on the seller.
Technically, the buyer was correct. The Supreme Court had to determine whether to interpret the statute as including emails, or stick to the strict construction of the written statute, which does not provide for emailed rejections.
Courts Take Into Account Realities of Technology
Every court underneath the New Jersey Supreme Court that heard the case held that although email was not specifically listed in the statute, sending emailed rejection during the attorney review period was “substantial compliance,” putting the other party on notice of the rejection within the time period, and thus qualified as a valid rejection.
The Supreme Court agreed, specifying that fax and email were permissible delivery methods, even though not specifically written into the agreement.
Do Not Guess How Contracts Will be Interpreted
Nobody should assume that a court will write something into a real estate contract that’s not there. Buyers and sellers should comply with every detail of every agreement signed, as courts are hesitant to say a party “substantially complied.”
Many things in a real estate contract that seem like minor details are vitally important and should be strictly followed.
Avoid problems by having an experienced real estate lawyer on your side. Contact Agnes Rybar LLC, to make sure you have representation in any real estate transaction.
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