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Kotkin v. Aronson

175 N.J. 453, 815 A.2d 962 (2003)

CONTRACTS; CONTINGENCIES—Absent an express threshold level in a contract inspection contingency clause, a buyer may reject a contract if radon gas is found at any level.

A contract for the sale of a home gave the buyer the right to have a home inspection covering a variety of areas including “the presence of radon gas.” The contract went on to provide “that if the home inspection revealed ‘any defect in the area specified above’ the buyer[] would have the right to terminate the contract ... unless the seller[] agreed ... ‘to repair and/or replace same, as may be required, at the Seller’s own cost and expense.’” The inspection revealed the presence of radon. In response, the seller “undertook remedial work which did not eliminate the radon but lowered the level substantially.” The buyer sought to terminate the agreement because the radon had not been eliminated. The seller refused to return the deposit. Expert evidence was before the lower court “that a radon level in excess of the remediated level here was considered acceptable” to most buyers. Nonetheless, the lower court concluded that because the contract referred simply to “the presence of radon gas,” the buyer could terminate the contract. “The parties were free to negotiate a specific level of radon as being acceptable, but did not.” The Appellate Division noted that had the contract set forth a “safe” level of radon it might have presented a triable issue of fact. Under the circumstances, the Appellate Division agreed with the lower court that there was no factual issue in question and that the buyer was entitled to terminate the contract.

On further appeal, the New Jersey Supreme Court affirmed the Appellate Division, holding that the seller did not qualify the radon clause and a “straightforward reading of the contract persuades us that the presence of radon gas is a basis for termination in these circumstances.” It didn’t matter that the Supreme Court was “mindful of seller’s contention that almost all homes have some measurable of radon gas.” It said, “[t]hat might be so, but it cannot defeat the plain language of the unqualified radon clause before us.”

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