OPINION OF THE COURT
This сase involves a contract for the sale of land. The buyer seeks specific performance; the seller has kept the down payment, claiming the buyer breached the contract. Pursuant to the contract, the buyer was obligated to make an interim payment of $250,000 by a particular date. Because the buyer made the payment two weeks late, the outcome of the appeal turns in part on whether, in connection with that obligation, time was “of the essence.” We hold that in contracts of this type, time of performance is not normally of the essence unless the contract so states or one of thе parties has unequivocally declared it upon proper notice.
A rider provided that ADC was entitled to a return of the $100,000 down payment if, despite good faith and due diligence, it failed to obtain the approvals. The rider further provided — of pivotal importance here — that ADC make an interim payment of $250,000 “[ujpon the later of the preliminary approval having been received from the applicable authоrities for the subdivision or December 31, 2001 but in no event later than December 31, 2001.” ADC was to pay the balance on filing the final approval and subdivision map. The contract contained no time-of-the-essence сlause and did not provide that ADC’s failure to make the interim payment by December 31, 2001 would put it in default.
When Coyote signed the contract, it did not have title to the property. In fact, it did not obtain title until July 12, 2001, some seven months later. Beginning June 22, 2001, the attorneys for the parties corresponded with one another. Writing to Coyote, ADC expressed concern that it would hot be able to proceed with its application for subdivision apрroval in time to appear at a scheduled planning board meeting if it did not immediately receive authorization from the property owner. If ADC did not receive the requested authorization, counsel wrote, “the Contract will be deferred accordingly.”
Coyote replied that written authorization had been sent to ADC’s agents “some time ago.” In a June 27, 2001 letter to Coyote, however, ADC insisted that it had still not received written authorization and that “all of the time frames within the contract are suspended until [it] has received the written authorization from the current landowner.” That day, Coyote faxed the current owner’s authorization to ADC. On December 26, 2001, Coyote’s attorney sent ADC a fax reminding ADC “that the contract of sale in the above matter requires an additional deposit of $250,000 to be made no later than December
By a December 31 fax, ADC’s counsel acknowledged the reminder and said that his principal was out of the country but would transfer the funds “upon his return on January 14, 2002.” Coyote did not immediately respond to this proposal; its counsel was also away. On January 10, 2002, however, an attorney who was of counsel to Coyote’s law firm wrote to ADC’s attorney informing him that Coyote considered ADC in default. ADC’s attorney respоnded the next day, enclosing a $250,000 check and insisting that the delay caused by his principal being out of the country did not constitute a default under the contract, inasmuch as it contained no time-of-the-essence рrovision. Over the next several months, the parties entered into negotiations by which Coyote would drop its objections to the timeliness of the payment if ADC agreed to some changes in the contract. The negоtiations stalled and on March 13, 2002, Coyote declared ADC in default and returned the $250,000 check.
On April 10, 2002 ADC brought this action seeking specific performance of the contract. The following month, however, Coyote аgreed to forgo its objections to the late payment in exchange for ADC’s consent to certain contractual changes. On June 5, 2002, ADC secured preliminary subdivision approval from the town planning board. It would bе a year, however, before final approval was granted. The parties exchanged drafts of the amended contract in June 2002, but negotiations again broke down and this litigation ensued.
In answer to ADC’s complаint for specific performance, Coyote sought dismissal and raised two affirmative defenses. First, Coyote claimed that ADC breached the contract by its late payment of the $250,000, resulting in its default. This default, Coyote аsserted, entitled it to keep the $100,000 down payment, which it sought by counterclaim. Second, Coyote asserted that the contract had been terminated when ADC failed to obtain final subdivision approval by June 30, 2002, and that if it were to return the down payment, Coyote would have no further obligation to ADC.
Both moved for summary judgment. Holding that Coyote improperly repudiated the contract, Supreme Court granted ADC’s motion and ordered specific performance. The Appellate Division reversed, ruling that ADC’s late payment constituted a
We modify and hold that ADC did not materially breach the contract by its late payment, and that there are triable issues of fact as to whether Coyote hindered ADC in its ability to perform.
Time of the Essence
The question whether ADC’s late installment payment constitutes a material breach depends on whether time was of the essence with respect to that payment. Unless it was, ADC had a reasonable time in which to tender performance after the specified date of Deсember 31, 2001
(see Grace v Nappa,
Grace
stands for the proposition that in contracts of this kind, time is not ordinarily of the essence unless the agreement so provides
(see also Brum Realty v Takeda,
We agree with
Whitney v Perry
(
Although the most effective way for a party to make time of the essence is to say so in the contract, we recognize that there may be circumstances in which a party would be justified in
Here, Coyote’s dеclaration of default was similarly ineffective. The contract did not contain a time-of-the-essence provision nor did Coyote’s December 26, 2001 fax put ADC on notice that its failure to pay on December 31 (as opposed to two weeks later) would amount to a default and the forfeiture of a $100,000 down payment. Accordingly, we conclude that ADC did not commit a material breach of the contract and is entitlеd to a return of its down payment.
Specific Performance
On this record, ADC is not entitled to specific performance as a matter of law. To obtain specific performance, it was necessary for ADC to show that it was ready, willing and able to fulfill its contractual obligations
(Huntington Min. Holdings v Cottontail Plaza,
But neither is Coyote entitled to a dismissal of ADC’s clаim for specific performance. ADC claims that Coyote frustrated its ability to obtain final subdivision approval. If Coyote was to blame for ADC’s failure, Coyote has no cause to charge ADC with it. “[A] party to a cоntract cannot rely on the failure of another to perform a condition precedent where he has frustrated or prevented the occurrence of the condition”
(Kooleraire Serv. & Installation Corp. v Board of Educ. of City of N.Y.,
Undisputedly, Coyote did not acquire title to the property until July 12, 2001, long after the contract was signed. ADC claims that Coyote had given oral assurances that it would
In sum, we hold that Coyote must return the down payment to ADC and that ADC’s claim for specific performance raises questions of fact requiring a trial.
Accordingly, the order of the Appellate Division, insofar as appealed from, should be modified, without costs, by remitting the case to Supreme Court for further proceedings in accordance with this opinion and, as so modified, affirmed.
Chief Judge Kaye and Judges Ciparick, Grapfeo, Read and R.S. Smith concur; Judge Pigott taking no part.
Order, insofar as appealed from, modified, etc.