Century 21 Real Estate v. Silvers, et al
N/AOUTCOME: On Appeal, Judgment Reversed in favor of Plaintiff
Buyers unilaterally rescinded their agreement to purchase Seller's home and demanded $10,000 refund. A liquidated damage clause limited damages to the amount of $10,000. The Trial Court granted Buyer ... s summary judgment. The Court of Appeals reversed and granted Seller summary judgment. On remand, Seller was awarded $10,000 and all of her attorney fees and costs. Supreme Court affirmed. Buyers claimed claimed they were excused from performing contract because they discovered after the date of rescission that a permit had not been obtained. Seller was unaware of requirement. The Court of Appeals held, in part, that: The parties plainly intended for the buyers to inspect and state any objections to the repairs prior to closing. In addition, the implied duty of good faith and fair dealing demands that a 'legal excuse' to cancel a contract be a matter known to the canceling party at the time of the notice of cancellation.2 For these reasons, we conclude that the Lees' discovery after closing that a permit and inspection had not been obtained is not a 'legal excuse' to cancel the parties' agreement. It is also significant that the Lees at all times had the option of reinspecting the repairs, but they declined to do so. That fact undercuts the statement in their notice of cancellation that they were unable to determine whether the repairs were performed in the manner called for by the agreement. In these circumstances, we conclude that Silvers' alleged failure to provide a receipt for the electrical work was not a material breach and did not amount to a legal excuse justifying cancellation of the contract.
