Question: The buyer’s home inspector states that the
air conditioning unit is defective. During the inspection period
the buyer requests that the seller replace the air conditioning
unit. The seller refuses to replace the air conditioning unit,
but states that the seller will repair the air conditioning unit
to working condition as required by the contract. The buyer refuses
to accept repair of the air conditioning unit, and cancels the
contract. The seller is demanding the buyer’s earnest money. Is
the seller entitled to the buyer’s earnest money?
Answer: No. When the buyer discovered during the inspection
period that the air conditioning unit was defective, the buyer
had the right to cancel the contract without making any request
of the seller. If the buyer requests that the seller replace the
air conditioning unit, and the seller refuses, the buyer should
still be entitled to cancel the contract.
