Renovest Co. v. Hodges Development Corp.

Facts:

Plaintiff agreed to buy an apartment complex from defendant for $1,476,000 with a $65,000 deposit. The July 24 contract specified that the deposit would serve as liquidated damages if plaintiff failed to close by September 3. There were three conditions precedent to plaintiff's obligation. The important two paragraphs were 3(b), relating to physical inspection of the property, and 3(d) relating to the buyer's obtaining financing at certain rates and terms. Plaintiff had fourteen days to get an inspection and three days afterward to notify defendant of his disapproval to void the contract. Plaintiff had forty-five days after inspecting defendant's business record to notify defendant of an intention to invoke the financing condition clause.

Plaintiff inspected the buildings on July 10, 17, and 23. Based on an engineer's August 6 report, plaintiff terminated the contract on August 7 and demanded return of his $65,000. Banks were initially favorable to financing but refused after hearing the report. Which time still existed to get further financing, plaintiff did not seek further financing. Plaintiff again wrote to defendant informing him of his failure to obtain financing as a further reason for termination.