The Appellate Division, First Department has ruled that, a buyer who did not appear at a contractually agreed-upon closing time of a $50 million real estate deal breached his contract with the seller, even though it is undisputed that the parties met three hours after the scheduled closing time. Therefore, seller was entitled to retain the $5 million down payment as liquidated KLIA2 damages.
The Court stated that “A standard provision included in many commercial contracts is one requiring any modification of the agreement to be in writing. Nevertheless, courts are presented over and over again with litigation arising out of circumstances where one party to a contract wrongly presumes, based on past practice, that an oral modification will be sufficient. This appeal illustrates the problem.” The 3pm meeting did not satisfy the contractual requirement that all modifications be in writing. As reported in the NYLJ, the 3pm meeting was, at best, partial performance of an oral modification.