A company, contracted to purchase a 23-acre piece of land on Staten Island’s waterfront for development. The seller, failed to obtain all of the necessary approvals before the closing deadline that the two parties had agreed upon. The purchaser is now seeking an abatement of the purchase price by suing Seller.
The contract however, clearly expressed that Purchaser was not to commence any legal action against Seller if they were unable to obtain the approvals. The purchaser then filed a lawsuit which sought specific performance to rescind and retain the down payment. Seller subsequently claimed that Purchaser was liable for anticipatory breach of the contract by filing the lawsuit. Purchaser claimed that Seller had to show that they were ready, willing and able to close the deal. However, Seller had not done so due to their lack of approvals.
In his ruling, Supreme Court Justice Charles Ramos rejected Purchasers claim that Seller had to show that they were ready, willing and able to close the deal by stating, “[t]he ready, willing and able requirement only applies when the non-breaching party is seeking to recover lost profits or expectation damages, and does not apply where, as here, a party merely seeks to recover a down payment.” Judge Ramos concluded that a seller in a transaction claiming anticipatory repudiation against the buyer doesn’t need to demonstrate that it was ready to close on the deal if it is not seeking lost profits. Accordingly, The Court dismissed Purchaser’s case in its entirety and ruled that the Seller was entitled to retain the down payment as a result of the Purchaser’s anticipatory breach of the Contract.
Peter Moulinos indicated that this decision was significant as it set out a situation where a court will award a seller a down payment in a contract dispute in light of an anticipatory breach by a purchaser.
This post was written by Nicholas Moneta. This case is cited as Princes Point LLC v. AKRF Engineering, P.C., Index No.: 601849/2008, (Sup.,Ct, New York County, Decided July 19, 2012).