A ruling this week by the top court in New York has determined that real estate buyers must demonstrate that they are willing and able to participate in a deal in order to sue for breach of contract. The unanimous decision stated that a developers' group in Queens did not meet this criteria and thus cannot sue the property holders for selling to another group.

The plaintiffs in the case contended that the seller failed to secure certificates of occupancy to cement the deal, instead choosing to sell the contract to another party after discovering that the properties had increased in value. The defendant argued that the original buyers were not prepared to close on the properties, and that the prospective buyers had breached the contract by failing to obtain proper financial backing.

This case demonstrates the continued battle between appellate courts and other judicial bodies in the state of New York. This final ruling came from the justices' argument that the "ready, willing and able" rule is reasonable because it protects the seller. The buyers can access resources that are sometimes unavailable to sellers, the justices say, so the burden of proof lies with those who intend to purchase the property.

Attorneys for the plaintiff think otherwise, saying that this rule gives the seller an unfair advantage. Sellers can now walk away from a deal at any time without consequences, they contend, a situation that can harm potential buyers.

The defendant's attorneys agree with the court's decision, claiming that the sellers would have been vulnerable to fraud if the judicial system hadn't come through. The case, they say, upholds a long-standing rule to protect sellers from buyers who are incapable of completing the deal.

Source: ThomsonReuters News & Insight, "NY high court resolves lower-court divide on real-estate rule," Dan Wiessner, Feb. 10, 2012