March 27, 2014 – In a recent case handed down by the New Jersey Supreme Court, the Court ruled that the notice requirement pertaining to rescission of a broker-drafted residential real estate contract during the three-day attorney review has changed.  Since 1983, rescission had to be communicated by certified mail, telegram, or personal delivery.  Given the drastic change in technologically and the way in which business is currently being transacted, the ruling states that parties can also send notice by fax or e-mail.

In the case of Conley v. Guerrero, a broker-prepared contract was executed for the purchase of a residential home.  During the attorney-review period, the seller’s attorney notified the buyers and their attorney, via fax and e-mail, that the contract was being rescinded.  While the plaintiffs cited McNally v. Kulak, in which a real estate contract was held to be enforceable after a rescission notice was sent via fax, Somerset County Superior Court Judge Edward Coleman said in the March 14th case that the purpose of the attorney-review clause, to protect parties from being bound by broker-prepared contracts without the opportunity to obtain protection of their interests, was served in the present case when the seller’s attorney sent notice via fax and e-mail.

The attorney-review clause originated in the 1981 case, New Jersey State Bar Association v. New Jersey Association of Realtor Boards, wherein the State Bar Association claimed that realtors engaged in the unauthorized practice of law when they prepare home sales contracts.  The parties eventually reached a settlement allowing realtors to continue to prepare sales contracts if the three-day attorney-review clause was inserted into each realtor-prepared contract.

Should you have any questions regarding this case, or should you seek a more detailed explanation of the law, please contact a Broder Law Group, P.C. attorney at 856-234-8768.

Broder Law Group, P.C. is a Moorestown, New Jersey law firm with attorneys licensed in New Jersey, Pennsylvania, New York and Connecticut.  The firm limits its practice of law to serving the needs of corporations, small businesses, individuals, and entrepreneurs in the areas of commercial real estate, business law, estate planning, special education law, collections and employment law.  If you would like to speak with one of our attorneys, please call 856-234-8768 or visit

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