Key Takeaways
- New Jersey contracts must meet all standard requirements including writing under the Statute of Frauds
- The attorney review clause gives both parties 3 business days to have an attorney review the contract
- During attorney review, either party can cancel or request changes without penalty
- Earnest money deposits are held in the broker's trust account or attorney escrow
- Time is of the essence provisions make contract deadlines strictly enforceable
Last updated: January 2026
New Jersey Purchase and Sale Agreements
National Real Estate Exam PrepFree exam prep with practice questions & AI tutor
Real estate contracts in New Jersey must meet all standard contract requirements plus New Jersey-specific provisions.
Standard Contract Requirements
For a valid New Jersey real estate contract:
| Requirement | Description |
|---|---|
| Competent Parties | Legal age (18+) and mental capacity |
| Offer and Acceptance | Meeting of the minds |
| Legal Purpose | Transaction must be lawful |
| Consideration | Something of value exchanged |
| Written Form | Statute of Frauds requires writing |
| Legal Description | Property must be identifiable |
The Attorney Review Clause
New Jersey has a unique attorney review provision:
Standard Attorney Review Period
| Element | Detail |
|---|---|
| Duration | 3 business days |
| Trigger | After contract signing |
| Who can use | Both buyer and seller |
| Purpose | Legal review of contract |
During Attorney Review
Either party's attorney may:
- Disapprove the contract entirely
- Request modifications to terms
- Approve the contract as written
- Let the period expire (contract becomes binding)
Key Points About Attorney Review
| Rule | Explanation |
|---|---|
| Business days only | Weekends/holidays don't count |
| Written notice required | Must communicate in writing |
| Either party can cancel | No penalty during this period |
| Modifications negotiable | Other party can accept or reject |
Exam Tip: The attorney review period is one of the most frequently tested New Jersey topics. Know that it's 3 business days and either party can cancel during this time.
Contract Contingencies
Common Contingencies in New Jersey
| Contingency | Description |
|---|---|
| Attorney Review | 3 business day review period |
| Mortgage/Financing | Buyer must obtain loan approval |
| Home Inspection | Buyer can inspect property |
| Appraisal | Property must appraise at value |
| Sale of Buyer's Home | Buyer must sell existing home |
Financing Contingency
The financing contingency protects buyers:
- Must apply for mortgage within specified time
- Must make good faith effort to obtain financing
- Can cancel if loan is denied
- Must meet lender requirements
Inspection Contingency
| Element | Standard Practice |
|---|---|
| Time period | Typically 5-10 days |
| Types | General, termite, radon, etc. |
| Buyer options | Request repairs, credit, or cancel |
| Seller options | Agree, counter, or refuse |
Earnest Money
Handling Requirements
| Requirement | Detail |
|---|---|
| Holder | Broker's trust account or attorney escrow |
| Deposit timing | As specified in contract |
| Documentation | Written receipt required |
| Disposition | Per contract terms or court order |
Earnest Money Disputes
When buyer and seller dispute earnest money:
- Broker/attorney holds funds
- Cannot release without agreement
- May require court determination (interpleader)
- Broker cannot make independent decision
Contract Termination
Ways Contracts Can Terminate
| Method | Description |
|---|---|
| Mutual agreement | Both parties agree to cancel |
| Contingency failure | Condition not satisfied |
| Attorney review disapproval | During 3-day period |
| Default/Breach | One party fails to perform |
| Impossibility | Contract cannot be performed |
Loading diagram...
Test Your Knowledge
How long is the standard attorney review period in New Jersey?
A
B
C
D
Test Your Knowledge
What can an attorney do during the attorney review period?
A
B
C
D