When “Due Diligence” Becomes a Dealbreaker: Lessons from Land Group, Inc. v. Palmieri

In Connecticut real estate, contracts do more than describe a deal. They direct traffic. Each clause sets a path for performance, deadlines, and what counts as doing your part. One case that shows this vividly is Land Group, Inc. v. Palmieri, 123 Conn. App. 84 (2010), where a developer’s relaxed approach to zoning approvals cost it a $1.6 million purchase and more than $128,000 in attorney’s fees.

The buyer, Land Group, signed a contract to purchase property in Westport. The deal depended on getting zoning approval for at least thirteen condominium units. The more units approved, the higher the price. Fewer units meant a discount. Everyone knew the property was zoned for only five units, so approvals were essential.

The contract said the buyer “shall pursue approvals and permits with due diligence.” The buyer took some steps, such as ordering a survey, drawing up architectural plans, and monitoring another developer’s application. But it never actually filed its own zoning application. When the sellers lost patience, they terminated the contract.

The buyer sued, claiming the sellers breached first. Both the trial and appellate courts disagreed. They found the buyer had breached the contract by failing to act with due diligence. As Judge Sullivan explained, “due diligence means doing everything reasonable, not everything possible.” Filing the zoning application was not optional. It was the core promise. Without it, the buyer could not perform and had no right to complain when the sellers ended the deal.

The court also reaffirmed several key contract principles. Courts look first to the words the parties used. “Shall pursue” is not a suggestion; it is a duty. A party cannot claim anticipatory breach if it was not capable of performing its own obligations. And when a contract allows for attorney’s fees, a party must clearly request them and explain the legal basis for doing so.

In the end, the buyer’s slow pace and lack of documentation cost it the deal and triggered the sellers’ right to terminate. For lawyers and businesspeople alike, Land Group is a reminder of the difference between good intentions and enforceable action. Promises in contracts are not poetic aspirations. They are performance instructions. When a contract calls for “due diligence,” the court will expect you to show your work.

If you have questions about probate, conservatorship, or multi-state estate issues, feel free to call me or schedule a time.

Disclaimer: This blog is for informational purposes only and does not constitute legal advice. Reading this post does not create an attorney-client relationship. Every case is different, and you should consult a licensed attorney for advice regarding your specific situation.