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Wednesday, October 19, 2005

Impossibility Excuses Landowner's Breach

New_york_flag_8 The doctrines of impossibility and mutual mistake saved a landowner from breach of contract after it failed to build a promised road to allow access to another parcel of land, according to a recent decision by the New York Appellate Division.

In the case, the defendant landowner had granted an easement across its property to the adjoining plaintiff landowner and had contracted to build a road on the easement. When the defendant failed to do so, the plaintiff sued. The trial court originally granted specific performance of the promise.  Turns out, however, that the land in question had been impliedly dedicated to the City of Peekskill for a public park back in 1929. Accordingly, the trial court reversed itself on the specific performance issue, but held that the defendant would be liable for damages.

Not so fast, my friend, said the Appellate Division. The land at issue was “impressed with a trust” the moment it was dedicated to the city.  Accordingly, a road could not be built across it by a private developer.  Defendant’s performance was clearly impossible, which would mean that it was not in breach of its contract.  Moreover, to the extent both parties thought the road could be built, there was a mutual mistake which again meant that there was no breach. Accordingly, the complaint hould have been dismissed.

Chateau Rive Corp. v. Enclave Dev. Assoc., 2005 NY Slip Op 7338, 2005 N.Y. App. Div. LEXIS 10596 (2d Dept. Oct. 3, 2005).

[Frank Snyder]

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