Blumberg v. Florence

— In an action for specific performance of a contract for the sale of real property, the defendant appeals from a judgment of the Supreme Court, Suffolk County (Luciano, J.), entered July 1, 1987, which, after a nonjury trial, directed her to convey the property to the plaintiffs. Ordered that the judgment is affirmed, with costs. On February 4, 1985, the plaintiff purchasers and the defendant seller entered into a contract to purchase residential real property located at 9 Sturbridge Lane in Dix Hills, New York, for a total purchase price of $341,000. Paragraph H of the rider to the contract provided that the contract was conditioned upon the purchasers obtaining a written commitment for a mortgage loan in an amount of not more than $100,000 by March 15, 1985. The paragraph further provided that the seller could cancel the contract by returning the purchasers’ deposit in the event the purchasers were unable to procure the loan within the time specified. At the end of the paragraph, the parties inserted a handwritten sentence which stated that the "Purchaser may waive this provision”. At the trial, the attorney for the seller denied receiving a letter dated March 15, 1985, mailed by the attorney for the purchasers, in which the purchasers indicated their election to waive the requirement to secure a mortgage commitment. However, the attorney for the seller admitted that he received a copy of the same waiver letter by hand on March 18, 1985. The evidence further established that on March 17, 1985, the seller sent a mailgram notifying the purchasers that she canceled the contract. However, she did not return the deposit made by the plaintiffs with her letter of cancellation. The seller returned the purchasers’ deposit in a separate letter which the purchasers’ attorney did not receive until March 19, 1985. Thereafter, the purchasers instituted the instant action for specific performance which the seller defended on the ground that she properly canceled the contract. While it is not clear whether the purchasers exercised their right to waive the mortgage requirement on March 15, 1985, they definitely communicated their election to waive on March 18, 1985. The seller’s attempt to cancel the contract by sending a mailgram on March 17, 1985 was ineffective. The contract provided that the seller had the right to cancel under the following circumstances: "In the event that purchaser is un [381] able to procure such loan within the time specified or extensions thereof, then the seller may cancel this contract by returning the deposit paid hereunder, and this contract shall be deemed null and void and all parties shall be released of any further liabilities” (emphasis supplied). Where the procedures for cancellation provided for by the contract specify conditions precedent to the right of termination, those procedures must be followed (see generally, General Supply & Constr. Co. v Goelet, 241 NY 28, mot to amend remittitur granted 241 NY 507; Missir v American Oriental Ice Mfg. Co., 201 App Div 756; 22 NY Jur 2d, Contracts, § 431). The contract expressly provided that the cancellation was to be effectuated by the return of the deposit. Having failed to include the deposit, the March 17, 1985 attempt to cancel was ineffective. Therefore, the plaintiff purchasers validly waived the requirement to secure a mortgage commitment when the seller received the waiver letter on March 18, 1985. Given the absence in the contract of a time limitation for exercising the right to waive, the purchasers communicated their decision within a reasonable time (see, e.g, Tendler v Lazar, 141 AD2d 717). Therefore, the court properly granted specific performance to the plaintiff purchasers. Thompson, J. P., Bracken, Eiber and Spatt, JJ., concur.