Centex Homes Corp. v. Boag
128 N.J. Super 385, 320 A.2d 194 (1974)
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Rule of Law:
Specific performance is not an appropriate remedy for a vendor of a condominium unit when the property is not unique and damages at law are adequate to compensate for the buyer's breach.
Facts:
- Centex Homes Corporation (Centex) was a developer engaged in constructing a large luxury high-rise condominium project with over 3,600 virtually identical units.
- On September 13, 1972, Eugene and Virginia Boag executed a contract to purchase one condominium unit, No. 2019, from Centex for $73,700.
- The Boags paid an initial deposit of $525 and delivered a check for an additional $6,870 to comprise a 10% down payment.
- Shortly thereafter, Mr. Boag was informed that his employer was transferring him to Chicago.
- On September 27, 1972, Boag notified Centex that he would be unable to complete the purchase and stopped payment on the $6,870 check.
Procedural Posture:
- Centex Homes Corporation sued Eugene and Virginia Boag in the Superior Court of New Jersey, Chancery Division.
- Centex's complaint sought either specific performance of the purchase agreement or, in the alternative, liquidated damages.
- Centex filed a motion for summary judgment on its claims.
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Issue:
Is a vendor of a mass-produced condominium unit entitled to the equitable remedy of specific performance to enforce a purchase contract against a defaulting buyer?
Opinions:
Majority - Gelman, J.S.C.
No, a vendor of a mass-produced condominium unit is not entitled to specific performance against a defaulting buyer. The court reasoned that the traditional basis for granting vendors specific performance—the doctrine of mutuality of remedy—has been abandoned in New Jersey. The modern test is whether the legal remedy of damages is adequate. While a buyer can often get specific performance because land is considered unique, a seller's damages are typically measurable in money. In this case, the condominium unit is not unique; it is one of hundreds of identical units sold by a developer in a manner similar to personal property. Therefore, the damages Centex sustained from the breach are readily measurable, making the remedy at law wholly adequate and the extraordinary equitable remedy of specific performance inappropriate.
Analysis:
This decision represents a significant modernization of contract remedies in real estate law, particularly for mass-produced housing. By rejecting the antiquated 'mutuality of remedy' doctrine, the court aligned the vendor's right to specific performance with the fundamental equitable principle of inadequacy of legal remedy. This case establishes that courts will scrutinize the 'uniqueness' of a property, treating fungible, high-density housing units like condominiums more like personal property (chattel) than unique parcels of land. The ruling curtails the automatic availability of specific performance for large-scale developers, pushing them toward seeking monetary damages, which are considered an adequate remedy for a breach involving a non-unique good.
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