Thursday, July 12, 2007

Interesting "attorney approval" case

Here's an interesting new case discussing the attorney approval language in a typical real estate contract:

Patel v. McGrath, No. 2-06-0472 (June 29, 2007) DuPage County (O'MALLEY) Reversed and remanded Trial court erred when it dismissed prospective buyer's complaint seeking specific performance of real estate purchase contract. Because correspondence from buyer's attorney, pursuant to attorney approval clause, specifically states that it was neither rejection of contract nor counteroffer; it served merely as a proposal for modification; and did not preclude binding contract. Further, correspondence from seller's attorney with no explanation for rejection of contract, coupled with re-listing of property for substantially higher price, creates material issue of fact by raising presumption that rejection was for price, a reason expressly prohibited by written agreement.

I'd suggest you read the case in its entirety...a very interesting discussion on what the attorney approval contingency in a real estate contract means. This may cause me to change some of our policies. I always said that anything you're doing under "attorney modification" was a counteroffer. Yet this case seems to say the neither rejection of contract nor counteroffer language in the attorney's letter takes it away from being a counteroffer. We'll see how this proceeds...I think it conflicts with other appellate court holdings.


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