Shimrak v. Goodsir

Peter and Patricia Shimrak (plaintiffs) entered into a purchase agreement to buy a house from Susan Goodsir (defendant). The purchase agreement conditioned the sale on the Shimraks’ ability to obtain financing within 30 days of Goodsir accepting the offer. If the Shimraks failed to obtain timely financing, the Shimraks had two option. The Shimraks could either request an extension or remove the financing contingency from the agreement. If Goodsir were to refuse a request for an extension, the purchase agreement would be voided. Following Goodsir’s acceptance, the Shimraks paid Goodsir $2,000 in earnest money and applied to their bank for financing. The Shimraks’ bank refused extend financing until after the Shimraks sold their current home. The Shimraks contacted Goodsir and proposed an amendment to the purchase agreement that would make the transaction contingent upon sale of the Shimraks’ current home. Goodsir rejected the proposal. Unable to sell their home to get financing, the Shimraks withdrew from the purchase agreement. Goodsir sold the house several months later at a significantly lower price. The Shimraks sued Goodsir for the return of the $2,000 in earnest money. Goodsir filed a counterclaim, alleging that the Shimraks had breached the terms of the purchase agreement. The trial court ruled in favor of the Shimraks, finding that the two options set forth by the agreement were discretionary, and that the Shimraks were entitled to forgo both options. Additionally, the trial court reasoned that the Shimraks’ request for an amendment making the sale contingent on the sale of their own home was a request for an extension to obtain financing. The court found that Goodsir voided the contract by rejecting the amendment. Goodsir appealed.