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E-Mails Did Not Create Binding Contract for Cooperative to Sell Roof Space

A cooperative entered into discussions with shareholders who leased three units in the building and wanted to purchase space located on the roof above their units.  The board decided not to proceed with the transaction.  The plaintiff shareholders sued for breach of contract and sought an order of specific performance requiring the board to complete the sale.

In support of their contention that there was a binding contract, plaintiffs relied on e-mails between one of the plaintiffs and the cooperative’s managing agent.  Plaintiffs contended that an e-mail from the managing agent constituted an acceptance of plaintiffs’ offer to purchase the roof space, creating a contract.  The court disagreed, finding that the e-mail “did not contain all material terms of the contract,” as required by the Statute of Frauds, which requires contracts for the purchase or sale of real property to be in writing.  The parties’ e-mails did discuss some of the transaction terms, such as the price and the number of shares to be allocated to plaintiff, but did not address other terms including financing, terms of payment, or a closing date.

Moreover, “communications that followed indicated that the parties were negotiating additional material terms” of the deal, that they anticipated entering into a formal contract later, and that the board would not make a final decision the sale until the annual shareholders’ meeting.  Therefore, “the totality of the parties’ communications thus show that the early emails relied upon by plaintiff did not constitute a binding contract.”

In light of this decision, the court did not need to decide whether the managing agent was authorized to act on the cooperative’s behalf.  The case is Levinson v. Perry Realty Corp., 2022 N.Y App. Div. LEXIS 173, 2022 N.Y. Slip Op. 00160 (1st Dep’t Jan. 12, 2023).