Appellant seller sought review of a judgment from the Superior Court of Orange County, Super. Ct. No. 719621 (California) which awarded respondent buyer the deposit in an aborted boat purchase.

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Appellant seller challenged the trial court judgment that awarded recovery of a deposit of an aborted boat purchase to respondent buyer. The parties executed a purchase agreement, whereby the transaction was contingent on the completion of a trial run and marine survey to the satisfaction of the acquiring parties. The court found that the agreement gave respondent the right to terminate the purchase by rejecting the trial run or marine survey, and also provided that a failure to accept either contingency by August 6, constituted a rejection. The court affirmed the judgment holding that an addendum did not constitute an acceptance of a modified marine survey contingency under Cal. Com. Code 2207 (1), and that the original agreement expired by its terms, since respondent did not unconditionally accept the survey by that expiration date. The court rejected appellant’s argument that respondent’s decision to reject the survey was not made in good faith because no covenant of good faith could be implied where the express terms of the agreement gave respondent the right to terminate the agreement for any reason by simply failing to accept either the trial run or the survey.


The court affirmed the trial court judgment, which awarded respondent seller recovery of a deposit on an aborted boat deal. The court held that where the purchase agreement provided that respondent could terminate the agreement for any reason, a covenant of good faith could not be implied and that the agreement expired by its own terms where respondent failed to accept the contingencies by the expiration date.