Death may be a good excuse for not showing up for work in the morning but it will not always relieve one of the obligations spelled out in a contract. Such was the case in the matter of Di Scipio v. Sullivan 816 N.Y.S.2d 577 recently decided by the Third Department of New York’s Appellate Division.

Here, a purchaser under a real estate contract of sale died before the deal could close and the estate lacked the liquidity needed to complete the closing. Unfortunately, the contract contained no mortgage contingency clause so the hapless estate had no way of completing the purchase and the seller moved for summary judgment to retain the down payment of $99,900. This motion was granted and the decision is most cautionary.

The court’s decision is as clear an example of the “Tough Luck Doctrine” as you might ever wish to see. The court admonished the defendant that “It has long been the rule in New York that a purchaser who defaults on a real estate contract without lawful excuse cannot recover the down payment.” Where impossibility or difficulty of performance is occasioned only by financial difficulty or economic hardship, even to the extent of insolvency or bankruptcy, performance of contract is not excused. Nor was it found that willfulness would be a determining factor here.

There is a message to lawyers here. Predictably, not all of our clients will live to finish the deals that we construct for them, especially if things become complicated. We are also not always privy to their other assets or estate plans so it may be hard to anticipate what happens if death should intervene. The real estate transaction here probably involved at least one million dollars judging from the size of the down payment so it was hardly trivial. What , if any , protection could have been built into the contract to insulate a purchaser’s estate? To what extent was such protection considered and was it bargained away with good reason? Sometimes we can’t protect our clients –especially the more aggressive and self-assured ones – from themselves. If that be the case, it is always a good idea to express our concerns to the client in writing before disaster strikes.