As somewhat of a companion blog to my recent blog about rescinding a loan before consummation of the loan transaction, a recent case in the Supreme Court (trial court) for Nassau County, NY, has somewhat of a similar twist, but involves the cancellation of a Residential Contract of Sale. The case is entitled Jenkins v. Hobbs, and is another case where no one wins except the attorneys.
In June 2010, Jenkins entered into a contract to purchase the property owned by Hobbs. The contract did contain a mortgage contingency clause which allowed Jenkins 45 days within which to obtain a mortgage and failing fulfillment of the contingency, the contract could thereafter be cancelled by either party by written notice to the attorney for the other party.
Jenkins did not obtain a mortgage commitment within 45 days, and in September 2010 the contract was cancelled. The parties agreed in the court case that the contract was cancelled, but neither could remember how or when, and there was no documentary evidence of the cancellation. The down payment paid by Jenkins was returned to Jenkins in February 2011.
In February 2012, Jenkins sued Hobbs for breach of contract as Hobbs refused to sell the property to Jenkins at that time unless Jenkins agreed to pay an additional $15,000 for the property. In response, Jenkins filed suit to enforce the contract which all parties agreed was previously cancelled. On a motion by Hobbs, the case brought by Jenkins was dismissed. It is hard to believe that an attorney would advise Jenkins to go forward with such a groundless case, but strange things happen in the world of real estate.
The foregoing statements are not to be considered as legal advice or as a legal opinion. If you are involved in a contract dispute you are advised to seek the services of a competent attorney.
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