## Facts

- Lipson agreed in writing to buy, and Southgate Park Corp. agreed to sell, a lot with a house to be built in conformity with specified plans and specifications.
- The printed agreement originally stated that acceptance of the deed and possession would not be conclusive of the seller-contractor’s performance, and that payment would not constitute acceptance of improper work or faulty materials.
- The parties struck the clause about acceptance of the deed and possession, but left intact the clause stating that payment of the purchase price would not constitute acceptance of improper work or faulty materials.
- At closing, Southgate Park delivered the deed and Lipson paid the price minus $1,000 held back under an escrow arrangement until certain remaining items were completed (including installation of appliances and grading/seeding).
- Lipson presented evidence that the house was built in an unskillful and improper manner, did not comply with plans and specifications, and used materials not meeting the contract standard.
- An auditor (nonfinal findings) and then a jury found for Lipson; the trial judge denied Southgate Park’s motion for a directed verdict and entered judgment for Lipson.
- On appeal, Southgate Park did not dispute the sufficiency of evidence of defective construction, but argued that acceptance of the deed and possession barred contract claims due to merger and the deletion of the “no conclusiveness” clause.

## Issues

1. Whether delivery and acceptance of the deed and possession merged the purchase-and-sale agreement into the deed, barring an action for breach of construction obligations.
2. Whether striking the clause stating that deed acceptance and possession were not conclusive of performance implied the opposite intent—that they were conclusive of performance.
3. Whether the surviving clause stating that payment is not acceptance of improper work or faulty materials preserved the buyer’s contract remedies after closing.

## Decision

- The Supreme Judicial Court of Massachusetts affirmed the judgment for Lipson.
- Acceptance of the deed and possession did not, by itself, extinguish the seller-contractor’s obligations to build in compliance with the plans, specifications, and material/workmanship requirements.
- The deletion of the deed/possession language did not amount to an express agreement that deed acceptance would conclusively establish performance.
- The surviving “payment is not acceptance” clause supported the conclusion that claims for improper work and faulty materials survived closing.
- The escrow holdback further indicated that performance obligations continued beyond delivery of the deed; the directed verdict was properly denied.

## Legal Principles

- Delivery and acceptance of a deed do not necessarily merge all terms of a prior purchase-and-sale agreement; collateral obligations, including construction duties, may survive absent clear contrary intent.
- A contractual provision stating that payment does not constitute acceptance of improper work or faulty materials preserves post-closing remedies for defective performance.
- Striking a standard-form clause does not create an affirmative covenant to the contrary unless the remaining text clearly states that intent.

## Conclusion

The court held that the buyer’s acceptance of the deed and possession did not bar a contract action for defective construction where the agreement and closing arrangements indicated continuing obligations and expressly preserved claims for improper work and faulty materials.


Lipson v. Southgate Park Corp., 189 N.E.2d 191 (Mass. 1963)