According to the case law as of the date of this article, if the seller accepts payment then the contract is not void because the seller has waived the obligation of the buyer to comply with that contract term.
The Case Of One Party To A Real Estate Contract Waiving Compliance To A Contract Term
In Caldwell, the case began with Alex Caldwell entering into a deal with Jacqueline Snyder to purchase Snyder’s RV (Recreational Vehicle) lot in the Florida Keys. Ms. Snyder agreed to sell the lot to Mr. Caldwell for $200,000.00.
Mr. Caldwell prepared a handwritten memorandum outlining their agreement. He gave Ms. Snyder a $5,000.00 check as a deposit on the property.
Ms. Snyder deposited Caldwell’s check into her bank account and requested that her attorney draw up the closing documents.
Then Mr. Caldwell’s check bounced. On March 8, 2002, Ms. Snyder’s attorney, Charles Milligan, sent a letter to Mr. Caldwell’s attorney, Scott Bender; it stated:
Dear Mr. Bender:
Please be advised that I have discussed the above referenced matter with my client and wish to advise you of certain non-negotiable conditions with respect to the purchase of the said Lot. Those conditions are as follows:
That the purchase price will be agreed upon-$200,000.00.
That the transaction shall close by 12 Noon on Thursday, March 14, 2002.
That Mrs. Snyder is permitted to have her mobile home remain on the said Lot until Monday, March 18, 2002.
That the $5,000.00 will be transferred to Charles M. Milligan Trust Account by wire transfer before 3:00 p.m. on Monday, March 11, 2002.
Your client can either wire transfer the funds necessary to close or appear at my office before Noon on Thursday with cash on hand. I am forwarding you the Title Commitment, the original Mortgage and Note, which should be executed by the Caldwells and returned to my office prior to the closing via overnight mail. In the event that any of the conditions are unacceptable to your client, be advised that my client shall deem the contract null and void. I trust that you will advise your client of these conditions and in the event that they still wish to purchase the property, that they will abide by the terms and conditions set forth above.
Mr. Caldwell responded by sending a cashier’s check by overnight mail on March 10, and on the following day, March 11, his lawyer called Mr. Milligan to confirm that Ms. Snyder, as the seller, had received the payment prior to the 3:00 p.m. deadline as stated in Milligan’s letter.
Attorney Milligan informed Attorney Bender that Ms. Snyder no longer wanted to sell the property. The deal was off.
Mr. Bender responded by faxing a letter of his own to Mr. Milligan. In it, he acknowledged Ms. Snyder’s decision not to sell, and then threatened to pursue legal action if Ms. Snyder did not follow through with the sale to Mr. Caldwell.
Milligan deposited Caldwell’s check.
On March 14, Mr. Caldwell showed up at Attorney Milligan’s office with the remaining $46,600.00, and signed the closing documents. However, Ms. Snyder refused to complete the sale and did not sign the closing documents.
So, Mr. Caldwell filed suit for (1) specific performance and (2) damages for breach of contract.
The trial court denied the claim for specific performance, and found that Ms. Snyder revoked her offer to sell prior to any “acceptance.”
Mr. Caldwell appealed the decision, and the appellate court agreed with him due, in part, to the fact that neither Snyder nor her attorney objected to the form of payment when Caldwell delivered the cashier’s check. In fact, Snyder’s attorney deposited the cashier’s check and then drew up the closing documents. Snyder gave no indication that the mode of payment was unacceptable.
By accepting Caldwell’s cashier’s check, there was a “meeting of the minds” between the buyer and seller.
The offer was accepted. A valid contract was formed. Snyder waived strict compliance with her offer’s designated mode of payment by accepting the cashier’s check without any objection. Consequently, the appellate court ordered specific performance of the contract.
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