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Buyer’s right to cancel was valid regardless of his ‘real’ motives

A New Jersey man agreed to buy a $4.5 million house, and put down a $400,000 deposit. The agreement said that the buyer had a right to conduct a radon test, and to cancel the deal if the results showed radon readings above a certain level.

The radon readings came back above that level. The sellers agreed to lower the price and to install a radon remediation system. However, while the radon system improved matters, some readings continued to be above the level in the contract.

The buyer cancelled the deal and demanded his $400,000 back.

The sellers, however, claimed that the buyer was acting in bad faith. They said he had told them that he wasn’t concerned about the radon, and that the “real” reason he wanted to cancel was that his wife had changed her mind and wanted to move to Texas.

The sellers refused to return the deposit, and the buyer sued.

A New Jersey appeals court sided with the buyer. The court said that the contract gave the buyer an absolute right to back out of the deal if the radon readings were too high…and even if the radon readings weren’t his “real” motive for cancelling the deal, that didn’t matter. As long as the contract gave him a right to cancel, his real reason for doing so was irrelevant.

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