Appeals Court of Massachusetts
481 N.E.2d 1383 (1985)
John Lynch (plaintiff) contracted to purchase a home from Andrew (defendant). In the purchase contract was a clause stating that Lynch would have his deposit returned if he was unable to obtain a mortgage to purchase the property by April 26, 1982. Lynch contacted two banks for a mortgage, ultimately only submitting a loan application to one bank. The bank became concerned when it noticed that the mortgage requested was for an amount significantly less than the purchase price of the home. Lynch explained that he was planning on making up the difference with the sale of his current home, which was not yet on the market. The bank refused to enter into this situation, but proposed a loan to make up the difference, which would be satisfied after Lynch’s current home was sold. To secure this additional loan, Lynch would be required to place a mortgage on his current home and his vacation home. When Lynch refused, the bank refused to grant him a loan. As a result, Lynch did not secure a mortgage by the April 26, 1982 deadline. Andrew was forced to sell her home at a later date for a lower price, and was also forced to purchase a home with lesser value than the one she had intended to buy had she been able to sell her home to Lynch. When Andrew kept the deposit of $25,400, Lynch brought suit. The judge, instead of awarding the deposit as damages, awarded actual damages of $8,400 to Andrew. Lynch appealed to the Appeals Court of Massachusetts.
Rule of Law
Holding and Reasoning (Kass, J.)
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