## Facts

- On August 26, 2003, Christian Dysart and Mildred Dysart (buyers) contracted to purchase William Cummings and Kimberly Cummings’s Raleigh home for $1,200,500 and tendered $10,500 in earnest money, which defendants received and held in escrow.
- The parties signed an “Additional Provisions Addendum” containing a “Cost of Repair Contingency” stating that if a **reasonable estimate** of the total cost of repairs required by Paragraph 12(b) and 12(c) of the contract equaled or exceeded $10,000, the buyers could terminate the contract and all earnest money would be returned.
- The addendum stated that if it conflicted with the offer to purchase and contract, the addendum would control.
- The contract required the buyers to complete inspections and give written notice of necessary repairs to the sellers on or before 14 days after acceptance.
- On September 8, 2003, a home inspection reported significant foundational/structural damage, and a structural engineer estimated repair costs over $10,000.
- On September 9, 2003, Bill Sewell (buyers’ agent) faxed notice to Mary Williams (sellers’ agent) stating the buyers had decided to terminate the contract pursuant to the addendum.
- The same day the sellers placed the property back on the market.
- After termination, a construction company provided the buyers an estimate of $58,910.23 for repairs, and the buyers demanded return of the $10,500 deposit.
- The sellers refused to return the deposit, obtained an estimate under $10,000, and later completed repairs for $6,986.11.
- The buyers sued for breach of contract to recover the earnest money; the sellers counterclaimed. The trial court granted summary judgment for the buyers, and the sellers appealed.

## Issues

1. Whether the buyers complied with the contract’s inspection and written-notice requirements when they terminated under the cost-of-repair contingency.
2. Whether the contingency depended on a reasonable repair estimate meeting or exceeding $10,000 at the time of termination, or instead on the later actual cost of repairs.

## Decision

- The North Carolina Court of Appeals affirmed summary judgment for the buyers.
- The court held the buyers’ inspections and written termination notice were timely and sufficient under the contract and addendum.
- The court interpreted the addendum to make the termination right turn on a reasonable estimate of required repairs equaling or exceeding $10,000, not on later repair invoices.
- The sellers’ subsequent ability to complete repairs for less than $10,000 did not defeat the buyers’ right to terminate and recover the earnest money once the contingency was properly invoked.
- With no genuine dispute of material fact on the controlling contract terms, the timing of notice, and the existence of professional estimates supporting the $10,000 threshold, summary judgment for the buyers was proper.

## Legal Principles

- Courts enforce clear contract language as written; when the parties specify that an addendum controls in the event of conflict, the addendum governs over inconsistent contract provisions.
- A cost-of-repair contingency keyed to a “reasonable estimate” is evaluated based on the reasonableness of the estimate when obtained and used to terminate, not by hindsight comparison to later repair costs.
- A contractual requirement of written notice is met by timely written communication that clearly states termination under the applicable contract provision, absent a required formality beyond written notice.
- Summary judgment is appropriate when the evidence shows no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law on contract interpretation and compliance.

## Conclusion

Because the buyers obtained professional assessments indicating repairs reasonably could exceed $10,000 and gave written notice terminating within the contract’s inspection period, the cost-of-repair contingency allowed them to cancel and recover their $10,500 earnest money deposit even though the sellers later repaired the home for less than $10,000.


Dysart v. Cummings, 640 S.E.2d 832 (2007)