Princess Point L.L.C. v. AKRF Eng’g, P.C., New York County Supreme Court Index No. 601849/2008
In this Commercial Division case, Justice Charles Ramos ruled that a seller was not required to demonstrate that it was ready, willing, and able to perform a contract where the purchaser has anticipatorily repudiated the contract in order to retain the contract deposit. Justice Ramos implied that the result would have been different had the seller sought expectancy damages.
This case arose out of a contract to purchase a 23 acre hazardous waste waterfront site. The contract was to close within thirty days of notice that the Seller had obtained all development approvals, but in all events, not later than an outside closing date. Although the parties agreed to extend the outside closing date, timely development approvals were not forthcoming. This action was commenced just prior to the expiration of the outside closing date as extended by the parties.
The ready, willing, and able requirement only applies when the non-breaching party is seeking to recover lost profits or expectation damages and does not apply where, as here a party merely seeks to recover a down payment.
The court had previously ruled that the buyer anticipatorily breached the contract by commencing the action prior to the outside closing date. The seller moved for a judgment entitling it to keep the contract deposit and certain other payments. The buyer argued that because the seller could not demonstrate it was ready willing and able to close, it could not recover the contract deposit.
Justice Ramos disagreed and held that “[t]he ready, willing and able requirement only applies when the non-breaching party is seeking to recover lost profits or expectation damages and does not apply where, as here a party merely seeks to recover a down payment.” Because the seller was merely seeking to retain the contract deposit as liquidated damages based upon the seller’s anticipatory breach, the seller was entitled to recover the contract deposit.
The lesson of Princess Point is that where a purchaser materially breaches first, the seller’s performance will be excused and the seller will be able to retain the contract deposit as liquidated damages.