Friedman v. Sommer

Appellate Division of the Supreme Court of the State of New York
99 A.D.2d 427, 1984 N.Y. App. Div. LEXIS 16580, 470 N.Y.S.2d 390 (1984)

ELI5:

Sections

Rule of Law:

In the context of a cooperative conversion offering plan, a written offer to a tenant specifying a 30-day acceptance period is deemed an irrevocable option contract, preventing the sponsor from withdrawing the offer prior to the expiration of that period.

Facts:

Defendant was the sponsor of a cooperative conversion plan for a building known as 'The Sovereign' where Plaintiff resided as a tenant in apartment 45G.
Defendant lived in the adjacent apartment, 45H, and desired to combine Plaintiff's apartment with her own.
Defendant issued the Sixteenth Amendment to the offering plan, granting tenants a 'non-exclusive right' to purchase their apartments for a period of 30 days.
During this 30-day window, Defendant decided to withdraw the offer for apartment 45G to secure it for her own use.
Defendant filed the Seventeenth Amendment with the Attorney General to officially withdraw the offer and had her agent verbally inform Plaintiff's husband of the withdrawal.
Six days after the withdrawal, but still within the original 30-day period, Plaintiff mailed a letter attempting to accept the offer to purchase the shares.
Defendant rejected the acceptance on the grounds that the offer had already been withdrawn.

Procedural Posture:

Plaintiff sued Defendant in the Supreme Court, New York County, seeking to enforce the purchase of the apartment.
The trial court (Justice Bowman) granted summary judgment in favor of the Plaintiff.
Defendant appealed the decision to the Appellate Division, First Department.

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Issue:

Is a written offer to sell a cooperative apartment, which grants a tenant a 'non-exclusive right' to purchase for a 30-day period, irrevocable by the sponsor during that timeframe despite lacking explicit language of irrevocability?

Opinions:

Majority - Memorandum Decision

Yes, the offer was binding and irrevocable for the stated period. The court affirmed the lower court's judgment without a written opinion, effectively ruling that the sponsor could not withdraw the offer to sell the apartment before the 30-day window expired, thereby granting the plaintiff the right to purchase the apartment.

Dissenting - Justice Kassal

No, the offer was revocable and validly withdrawn before acceptance. Justice Kassal argued that under New York General Obligations Law § 5-1109, an offer made without consideration is only irrevocable if the writing expressly states it is 'irrevocable.' Since the amendment merely stated a time period (30 days) and used the term 'non-exclusive,' which implies the possibility of sale to others, it did not meet the statutory requirement for irrevocability. Therefore, the defendant had the right to revoke the offer before the plaintiff accepted.

Analysis:

This case illustrates the tension between specific housing regulations (like cooperative conversion plans) and general contract law statutes. While the dissent applied a strict reading of the General Obligations Law—which requires explicit language to create a firm offer without consideration—the majority implicitly prioritized the protective nature of the offering plan, treating the time-limited offer as a binding option. This decision serves as a warning to drafters of offering plans that specifying a duration for an offer may create irrevocability even without using the magic word 'irrevocable.'

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