In Miracle ** P* LLC v N* ** LLC, the plaintiff sought to retain a $1 million down payment after the defendant failed to close on the purchase of three condominium units as agreed. The dispute centers on breach of contract, adherence to notice provisions, and the enforceability of contractual deadlines.
In August 2022, the parties entered into an agreement for the sale of three condominium units for $15.5 million, with the defendant placing a $1 million deposit. After executing a second amendment to the contract in November 2023, the defendant affirmed that it had secured financing, waived all contingencies related to condominium approval, and committed to closing within ten days. The closing was scheduled for November 30, 2023. However, on November 29, the defendant informed the plaintiff that its lender was delayed due to the Thanksgiving holiday and requested an extension to December 8, 2023. Plaintiff agreed but made clear that the transaction had to close by December 11, or the deposit would be forfeited.
On December 7, 2023, the defendant notified the plaintiff that it could not close on the agreed-upon date. As a result, on December 11, the plaintiff declared the contract terminated and demanded the deposit. The defendant challenged this, arguing that proper notice had not been provided in accordance with the agreement’s terms. The court rejected this argument, finding that the notice, though addressed to an attorney different from the one named in the agreement, was sent to a member of the same law firm, meaning the defendant was neither deprived of actual notice nor prejudiced.
The motion court granted summary judgment in favor of the plaintiff, finding that the defendant had defaulted on its obligations and that the contract explicitly stated that failure to close on time would result in forfeiture of the deposit. The court also rejected defendant’s procedural arguments concerning notice and reaffirmed the enforceability of contractual deadlines when a party has expressly waived contingencies. The Appellate Division, First Department, later affirmed, citing precedent that supports strict enforcement of "time is of the essence" provisions in real estate transactions.
An extension would have been a miracle ....
# # #
DECISION