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Seeking Specific Performance of a P&S Agreement When the Seller Failed to Show Up at Closing

A real estate sales contract must comply with the Statute of Frauds, meaning that it must be in writing, contain a description of the property and the agreed-upon price.  Further, the parties must intend to be bound by the contract. Unless the seller has a legal excuse to breach the contract, a purchase and sale agreement (“P&S agreement”) will be enforced provided that the buyer is ready, willing, and able to proceed with performance of the contract at the agreed time of closing. Courts have found that appearing at a scheduled closing with a check for the agreed upon price is sufficient evidence of being “ready, willing and able to close.”

In McCullough, as Trustee v. Chase Great Marsh, LLC, the Land Court recently ruled that a buyer was entitled to enforce P&S agreement when the buyer appeared at the closing, but the seller did not.

The seller claimed that it had no obligation to appear at the closing because the P&S agreement was terminated and, in any event, the buyer had not met her pre-closing obligations. The buyer, who appeared at the closing with a check in hand, disputed that the P&S agreement was terminated and argued that she had either met her pre-closing obligations or had lawfully waived them.

The seller offered several legal excuses for skipping the closing and not performing.  For instance, it claimed that the frustration of doctrine applied. The P&S agreement contemplated that the buyer, who owned an adjacent land, was going to obtain satisfactory zoning approvals to combine the parcels of land and then subdivide them.  The buyer’s decision not to pursue that plan – the seller argued – frustrated the purpose of the P&S agreement. The court disagreed. The P&S agreement did not contain any provision suggesting that the combining and subdividing of the parcels of land was a mutual objective of the parties. Rather, it was an objective that only belonged to the buyer (buyer purchases the land “in connection with her efforts to obtain favorable action” from municipal authorities).

The seller also claimed that the P&S agreement terminated when the seller sent a written notice to the buyer that it was “not willing to proceed with the sale of the property.”  The court rejected that argument, noting that per its own provision, the agreement could only be “cancelled, modified or amended by a written instrument executed by both” the buyer and the seller. Relying on Cambridgeport Sav. Bank v. Broesner (holding that parties may orally modify non-material terms of a contract such as time and mode of performance), the seller also argued that the P&S agreement terminated when the seller had a conversation with the buyer about terminating the contract. The court declined to extend the holding of Cambridgeport Sav. Bank v. Broesner to written-termination clauses.

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