Usually, “anniversary” posts on this blog are keyed to a decision of the Supreme Court. Today’s post, however, recalls Salvatore v. Trace, 109 N.J. Super. 83 (App. Div. 1969), decided on August 27, 1969.
This case involved a failed real estate closing and a lawsuit for specific performance. The trial court denied specific performance and dismissed the complaint. There were two reasons for that decision.
First, the contract was found to be too indefinite to be enforced. The land to be conveyed included seven lots designated on a certain map, plus “a piece of ground of at least 25 foot frontage on Oak Avenue being part of the premises owned and occupied by the Sellers. The depth to be at least the minimum requirement by the Burough [sic] or Township ordinances * * *.” The trial court held that the 25-foot strip was not well-enough defined to permit an order for specific performance of the contract.
Second, the contract contained a time of the essence provision. The deed for the property was to be delivered on a date certain. That did not occur. Accordingly, the trial court cited that as an additional basis for denying specific performance.
Plaintiff appealed, and the Appellate Division reversed by a 2-1 vote. The majority found neither of the trial court’s rationales to be correct.
The Appellate Division agreed that “the contract reference to ‘a piece of ground of at least 25 foot frontage on Oak Avenue’ lacked definiteness and standing alone could not be enforced.” But that problem was cured when subdivision approval was sought before the local Planning Board. In connection with that proceeding, as the Appellate Division recounted, the subdivision map had “notations on it specifically designating the lands to be retained by the sellers and those to be conveyed to the purchaser-plaintiff.” Defendant had “certified on the subdivision map that he owned the land and consented to approval of the map,” thus eliminating “any indefiniteness in the contract … by supplying a definite and precise description of the land.”
The Appellate Division also parted ways with the trial court on the time of the essence issue. While recognizing that a time of the essence provision converts contract performance dates from merely “formal” to “essential,” the court observed that “the parties may nevertheless later waive that provision by their conduct.” There was such a waiver here.
There had been delay due to the time it took to get local and county planning board approvals. “Both parties were still collaborating on the eve of that performance date in an effort to effectuate their mutual desire to consummate the sale. It was in every sense an on-going transaction. To allow defendants, under these circumstances, to terminate the contract, to plaintiff's detriment, because the settlement was not made on or before December 8, would produce an unconscionable result.” That was especially so since defendant admitted that he was not prepared to deliver the deed on the designated date.
This was likely not the first New Jersey decision to hold that a time of the essence provision can be waived by the conduct of the parties. Notably, however, the Appellate Division’s cited authorities for its ruling were the Williston and Corbin treatises on contracts, not any caselaw from New Jersey or elsewhere. As a result, this opinion may be considered a leading case on the time of the essence issue in New Jersey. I have seen it cited in at least one of my own cases.
Finally, as noted above, there was a dissent in the Appellate Division. That dissent addressed the time of the essence issue, which permitted an appeal as of right to the Supreme Court on that question. But there were no further proceedings.
