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Maxton Builders, Inc. v. Lo Galbo

New York Court of Appeals
502 N.E.2d 184 (1986)

Written by Craig Conway, LLM

Facts

Maxton Builders, Inc. (Maxton) (plaintiff) entered into a contract to sell a newly constructed home to Cynthia and Richard Lo Galbo (defendants) for $210,000. If the property taxes exceeded $3,500, the agreement provided the Lo Galbos with the option to cancel the contract upon written notice to Maxton within three days of tendering a $21,000 down-payment check. After learning that the property taxes were much greater than $3,500, the Lo Galbos’ attorney sent written notice to Maxton’s attorney informing him of their decision to cancel the contract. However, the letter was not received by Maxton’s attorney within the required three-day time period. Thereafter, the Lo Galbos stopped payment on their down-payment check. Maxton filed suit against the Lo Galbos to recover the down-payment amount, alleging that they had breached the contract. The trial court agreed and held in favor of Maxton. The Lo Galbos appealed. The appellate division affirmed the trial court’s judgment. The New York Court of Appeals granted certiorari to review.

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Holding and Reasoning (Wachtler, C.J.)

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