The Attorney Review Clause

In New Jersey, all realtor-prepared contracts for the sale of residential real estate, containing one to four dwelling units and most leases, must contain an attorney review clause.  The attorney review clause, approved by the Supreme Court of New Jersey, states as follows:

1.       Attorney Review:

The Buyer or the Seller may choose to have an attorney study this contract.  If an attorney is consulted, the attorney must complete his or her review of the contract within a three-day period.  This contract will be legally binding at the end of this three-day period unless an attorney for the Buyer or the Seller reviews and disapproves of the contract.

2.       Counting the Time:

You can count the three days from the date of delivery of the signed contract to the Buyer and Seller.  You do not count Saturdays, Sundays or legal holidays.  The Buyer and the Seller may agree in writing to extend the three-day period for attorney review.

3.       Notice of Disapproval:

If an attorney for the Buyer or the Seller reviews and disapproves of this contract, the attorney must notify the Broker(s) and the other party named in this contract within the three-day period.  Otherwise, this contract will be legally binding as written.  The attorney must send the notice of disapproval to the Broker(s) by certified mail, by telegram, or by delivering it personally.  The telegram or certified letter will be effective upon sending.  The personal delivery will be effective upon delivery to the Broker’s office.  The attorney should also inform the Broker(s) of any suggested revision) in the contract that would make it satisfactory.

This clause makes the contract subject to review by an attorney for a Buyer or a Seller within 3 business days.  The parties may also agree in writing to extend the time for attorney review.  The contract becomes legally binding and final unless the contracting party’s attorney cancels or disapproves it during the attorney review period.  Buyers and Sellers are often under the impression that a document signed is not a contract of sale but rather a “binder” or “memorandum,” by which the parties demonstrate their good faith and intention to sign an actual contract in the future.  The parties often do not realize their signature constitutes a contract, unless it is cancelled pursuant to the attorney review clause.

Once the notice of disapproval is delivered, the contract becomes void and the parties have no further obligation to each other.  Typically, however, the notice of disapproval contains suggested changes/additions to the Contract which would make the Contract acceptable to that party.  The contract will become binding again if the other party agrees to the suggested changes.


** The attorney review clause is only applicable to real estate broker prepared contracts.  It does not have to be included in a contract that is prepared by an attorney. **

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