A purchase and sales agreement for a lakefront property on Lake Winnipesaukee in New Hampshire is conditioned upon the buyer obtaining a permit from the NH Department of Environmental Services for a proposed dock expansion within the shoreland protection zone under RSA 483-B. The permit is denied. The seller argues the contract is still binding because the buyer should have known permit approval was uncertain. What is the most accurate legal analysis of this situation?
Correct Answer
B) The contract is voidable at the buyer's option because the permit contingency was not satisfied, allowing the buyer to exit and recover the deposit.
When a purchase agreement contains a valid permit contingency and the required permit is denied, the contingency has not been satisfied. This makes the contract voidable at the buyer's option — the buyer may elect to terminate and recover the earnest money deposit. The seller's argument about the uncertainty of permit approval is irrelevant; the contingency was specifically included to protect the buyer against exactly this outcome. RSA 483-B shoreland restrictions make DES permits for dock expansions a legitimate and important contingency in NH lakefront transactions.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A bilateral contract is an agreement in which both parties exchange promises and are both obligated to perform, while a unilateral contract is one in which only one party makes a promise and the other party is not obligated to act.
A breach of contract occurs when one party fails to perform their obligations under the contract without a legal excuse. The non-breaching party is entitled to legal remedies including damages, specific performance, or contract rescission.
Consideration is something of value exchanged between parties to a contract, making the agreement legally binding. It can be money, a promise to act, a promise to refrain from acting, or anything else of value.
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