Renovest Co. v. Hodges Development Corp.

On June 30, 1986, Renovest Co. (Renovest) (plaintiff) agreed to purchase an apartment complex from Hodges Development Corp. (Hodges) (defendant). Renovest paid a $65,000 deposit. The purchase and sale agreement contained two conditions precedent. The first required that Renovest’s inspection be completed within 14 business days and that if the inspection was unsatisfactory, Renovest could inform Hodges of its intent to void the contract, so long as such notice was within three days of the inspection. The second condition precedent was that if Renovest could not obtain sufficient financing within 45 days, it could void the contract. Upon execution of the agreement, Renovest started the process of obtaining financing. Renovest inspected the complex on July 10, and found a crack in one of the apartment buildings. On July 11, Renovest called Hodges to inform it of the crack and suggest that it hire a structural engineer to further inspect the building. After this, Renovest did not continue its pursuit of financing because it assumed that banks would not offer financing for the purchase of a cracked building. After further inspections, Renovest informed Hodges on August 7 that it was terminating the agreement on account of the inspection condition. On August 12, Renovest informed Hodges that its failure to obtaining financing constituted additional grounds for termination of the agreement. Hodges refused to return Renovest’s deposit. Renovest brought suit. The trial court granted Hodges’s motion to dismiss. Renovest appealed.