A buyer and seller sign a residential purchase contract in Union County, New Jersey. During the three-business-day attorney review period, the seller's attorney sends a disapproval letter. Two days later, the seller's attorney calls the buyer's attorney and says the seller has changed her mind and wishes to reinstate the original contract. The buyer agrees and both attorneys sign a written reinstatement agreement. Is the contract reinstated under New Jersey law?
Correct Answer
A) Yes, because both parties agreed in writing to reinstate the contract, which satisfies the Statute of Frauds
Under New Jersey law, while a disapproval letter during attorney review terminates the original contract, nothing prevents the parties from subsequently entering into a new agreement or reinstating the original contract terms by mutual written agreement. If both parties voluntarily agree in writing to reinstate the original contract after a disapproval, that written agreement satisfies the Statute of Frauds and creates a new binding contract. New Jersey courts have recognized that parties may reinstate a contract terminated by attorney review through a subsequent written agreement. A new attorney review period would attach to this reinstated agreement.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
Equitable title is the buyer's interest in a property after a purchase contract is signed but before closing, giving the buyer the right to acquire legal title in the future. The seller retains legal title until the deed is delivered at closing.
More Contracts Questions
Which of the following is required for a valid contract in California?
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After a residential purchase contract has been signed by both parties in Illinois, the buyer and seller verbally agree to change the closing date. What is the legally sound way to document this change?
Specific performance in North Dakota:
- → In a contract for deed (land contract), who retains legal title to the property until the purchase price is fully paid?
- → Which of the following is NOT required for a valid bill of sale?
- → A Nevada real estate salesperson is helping a buyer draft a purchase agreement. Which of the following is NOT a required element for a Nevada residential purchase agreement to be legally enforceable?
- → Sawyer Iverson is reviewing an Illinois issue in Joliet. The person assumes that attorney review automatically replaces every inspection, appraisal, or financing deadline in a standard Illinois residential contract. Which statement best applies?
- → Tom and Linda sign a purchase agreement for a home in Hartford, Connecticut. The agreement includes a financing contingency stating that if Tom cannot obtain a mortgage commitment within 21 days, either party may void the contract. On day 19, Tom's lender issues a written mortgage commitment. On day 22, Tom changes his mind and tries to void the contract by claiming the financing contingency was not satisfied. Which of the following best describes the legal status of the contract?
- → Avery Jenkins is reviewing an Illinois issue in Normal. The person asks what happens if neither attorney sends a disapproval or proposed change during the standard review period. Which statement best applies?
- → Under Montana law, a purchase agreement for residential real property becomes legally binding on the seller when which of the following occurs?
- → Johnny wants the seller's patio furniture included in his purchase of a house. Before the offer is signed and delivered to the seller, he asks his agent to attach a page covering the furniture to the offer. That attached page is best described as:
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- → A contract where one party uses threats to force the other party to sign is considered:
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