A seller in Bedford, NH accepts a buyer's offer and both parties sign the purchase and sale agreement. The agreement does not include an inspection contingency. Three days after signing, the buyer hires a home inspector who discovers that the private well on the property has coliform bacteria contamination. The buyer demands to cancel the contract and receive a full refund of the $10,000 earnest money. The seller refuses, arguing the contract is binding with no inspection contingency. Which of the following best describes the outcome under New Hampshire law?
Correct Answer
C) The buyer may have a claim if the seller knew of the contamination and failed to disclose it on the Residential Property Disclosure Form
Under RSA 477:4-d through 477:4-f (NH Residential Property Disclosure Act), sellers of residential property must disclose known material defects, including the known condition of the water supply system. If the seller knew of the coliform contamination and failed to disclose it on the Residential Property Disclosure Form, the buyer may have a valid claim for rescission based on fraudulent concealment or misrepresentation of a material fact. This is distinct from a contractual inspection contingency — the seller's statutory disclosure obligation exists independently of the contract's contingency provisions.
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Related Topics & Key Terms
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Related Concepts
An assignment of contract transfers one party's rights and obligations under a contract to a third party called the assignee. The original party, known as the assignor, transfers their contractual position to someone who was not originally part of the agreement.
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.
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