After giving Griffen Gillette a $10,000 down payment toward the purchase of a piece of real property, Jeremy Meyers stopped payment on the check and faxed a letter to Gillette's broker withdrawing the offer.
When Gillette later filed suit to recover damages for contract breach, the Otsego County Supreme Court granted Gillette's motion for summary judgment.
On appeal, the Appellate Division, Third Department, noted that a purchaser who defaults on a real estate contract, without providing a "lawful excuse," may not recover a down payment.
And, according to the AD3, the letter sent by Meyers lacked a satisfactory explanation for the rescission.
Although Meyers alleged that the deal was contingent upon the property's physical inspection, that term did not appear in the parties' contract. Therefore, stopping payment on that basis amounted to a wrongful refusal to perform a contractual obligation.
Meyers's insistence that an attorney-approval clause operated in his favor, was also not embraced by the AD3. That provision required Meyers's attorney to notify Gillette's broker of any disapproval in writing within seven days of the deal's acceptance. Since that notice never issued, Meyers's reliance upon that provision was also bounced right out of court.
An inelastic outcome, wouldn't you agree?
For a copy of the Appellate Division's decision, please use this link: Gillette v. Meyers