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Keywords

contractbreach of contractplaintiffdefendantprecedent
contractbreach of contractplaintiffdefendant

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Maxton Builders, Inc. v. Lo Galbo, 68 N.Y.2d 373, 502 N.E.2d 184, 509 N.Y.S.2d 507

Facts

In 1983, the defendants contracted to purchase a house from the plaintiff for $210,000, providing a $21,000 down payment. A rider in the contract allowed the defendants to cancel if real estate taxes exceeded $3,500, which they attempted to do after discovering the taxes were indeed higher. However, their notice of cancellation was not received by the plaintiff within the required three-day period, leading to the plaintiff suing for breach of contract after the defendants stopped payment on their check.

In 1983, the defendants contracted to purchase a house from the plaintiff for $210,000, providing a $21,000 down payment.

Issue

Did the defendants effectively cancel the contract, and were they entitled to recover their down payment despite their breach?

Did the defendants effectively cancel the contract, and were they entitled to recover their down payment despite their breach?

Rule

A vendee who defaults on a real estate contract without lawful excuse cannot recover the down payment, even if the vendor resells the property for an equal or greater amount.

A vendee who defaults on a real estate contract without lawful excuse cannot recover the down payment, even if the vendor resells the property for an equal or greater amount.

Analysis

The court determined that the defendants' notice of cancellation was ineffective because it was not received within the three-day period specified in the contract. As a result, the defendants' refusal to perform constituted a breach, and the vendor was entitled to retain the down payment as per the established legal precedent.

The court determined that the defendants' notice of cancellation was ineffective because it was not received within the three-day period specified in the contract.

Conclusion

The court affirmed the Appellate Division's order, allowing the vendor to retain the entire down payment due to the defendants' breach of contract.

The court affirmed the Appellate Division's order, allowing the vendor to retain the entire down payment due to the defendants' breach of contract.

Who won?

The vendor prevailed in the case because the court found that the defendants did not properly cancel the contract, thus constituting a breach.

The vendor prevailed in the case because the court found that the defendants did not properly cancel the contract, thus constituting a breach.

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