Appeal by Defendant from judgment entered 11 August 2006 by
Judge Benjamin G. Alford in Superior Court, Pender County. Heard
in the Court of Appeals 9 May 2007.
H. Kenneth Stephens, II for Plaintiffs-Appellees.
White & Allen, P.A., by Gregory E. Floyd and Richard J.
Archie, for Defendant-Appellant.
Eugene S. Ball, Peggy M. Ball, Patricia G. Miller, and Kenneth
C. Miller, Sr. (Plaintiffs) filed a complaint on 23 December 2003
against Robert E. Maynard, Jr. (Defendant). Defendant sent a
letter dated 24 February 2004 to the trial court and to Plaintiffs.
In the letter, Defendant stated that the letter was in response to
Plaintiffs' action. Defendant filed an amended answer dated 17
June 2005. The amended answer was accepted by the trial court in
an order filed 18 July 2005, and the trial court entered judgment
on 11 August 2006.
The trial court made the following unchallenged findings of
fact: Plaintiffs, as buyers, and Defendant, as seller, entered into
an Offer to Purchase and Contract (the contract) for real property
located in Pender County (the property) on 11 December 2002. At
the time the parties entered into the contract, Plaintiffs were
provided a Septic Improvements Permit (the permit) for the
property, and Defendant represented to Plaintiffs that the permit
was valid. A section of the contract entitled "Sewer System"
stated the following: "[Plaintiffs] [have] investigated the costs
and expenses to install the sewer system approved by the
Improvement Permit attached hereto as Exhibit A and hereby
approve and accept said Improvement Permit." (R p. 36).
The trial court further found that prior to entering into thecontract with Plaintiffs, Defendant had previously conveyed an
approximately ten-foot strip of the property to a third party.
Unbeknownst to Defendant, this conveyance invalidated the permit.
Plaintiffs later learned that the permit was invalid and requested
that Defendant provide them with a valid permit. However,
Plaintiffs agreed to purchase the real property minus the ten foot-
strip of land previously conveyed by Defendant. Defendant then
agreed to apply for a valid permit for the property, and did so in
Defendant attempted to terminate the contract and tendered
Plaintiffs' earnest money on or about 4 September 2003, which
Plaintiffs refused. Plaintiffs again requested that Defendant
provide them with a valid permit, and that Defendant close on the
purchase of the property pursuant to the terms of the parties'
contract. Defendant refused. The Pender County Health Department
subsequently issued a new Septic Improvements Permit for the
property on 21 November 2003.
The trial court concluded the following:
2. That the parties had modified the
[c]ontract to the extent that the time for
performance on the part of . . . Plaintiffs
was extended to allow . . . Defendant to
obtain a valid Septic Improvements Permit.
3. That . . . Plaintiffs had a reasonable
time in which to close the purchase of the
. . . property which reasonable time had not
run as of the date that . . . Defendant
attempted to terminate the contract.
4. That the attempted termination of the
contract by . . . Defendant and
. . . Defendant's refusal to transfer the
property to . . . Plaintiffs was a breach of
the agreement between the parties.
5. That . . . Plaintiffs are entitled to the
Court's Order ordering specific performance of
the contract on the part of . . . Defendant.
The trial court ordered Defendant to convey the property to
Plaintiffs pursuant to the terms and conditions of the parties'
contract. Defendant appeals.
"In an appeal from a judgment entered in a non-jury trial, our
standard of review is whether competent evidence exists to support
the trial court's findings of fact, and whether the findings
support the conclusions of law." Resort Realty of the Outer Banks,
Inc. v. Brandt, 163 N.C. App. 114, 116, 593 S.E.2d 404, 407-08,
disc. review denied, 358 N.C. 236, 595 S.E.2d 154 (2004). A trial
court's conclusions of law are reviewable de novo. Humphries v.
City of Jacksonville, 300 N.C. 186, 187, 265 S.E.2d 189, 190
 Defendant argues the trial court erred by concluding that
"the parties had modified the [c]ontract to the extent that the
time for performance on the part of . . . Plaintiffs was extended
to allow . . . Defendant to obtain a valid Septic Improvements
Permit." Specifically, Defendant argues that any modification of
the contract did not comply with the Statute of Frauds and lacked
Generally, the obligations of a buyer and a seller under a
real estate purchase agreement "are deemed concurrent conditions--
meaning, that neither party is in breach of the contract until the
other party tenders his/her performance, even if the date
designated for the closing is passed." Dishner Developers, Inc. v.Brown
, 145 N.C. App. 375, 378, 549 S.E.2d 904, 906, aff'd per
, 354 N.C. 569, 557 S.E.2d 528 (2001). "It is well settled
that absent a time-is-of-the-essence clause, North Carolina law
'generally allows the parties [to a realty purchase agreement] a
reasonable time after the date set for closing to complete
(quoting Fletcher v. Jones
, 314 N.C. 389, 393,
333 S.E.2d 731, 734 (1985)). "'[W]hen time is not of the essence,
the date selected for closing can be viewed as "an approximation of
what the parties regard as a reasonable time under the circumstance
of the sale."'" Id.
, 314 N.C. at 393-94, 333
S.E.2d at 735 (quoting Drazin v. American Oil Company
, 395 A.2d 32,
34 (D.C. Ct. App. 1978))). "[T]he parties may waive or excuse
non-occurrence of or delay in the performance of a contractual
, 314 N.C. at 394-95, 333 S.E.2d at
In Dishner Developers
, the defendant's contract to purchase
real property from the plaintiff contained a thirty-day cure
provision after written notice of a title defect, and further
provided that closing would take place on or before 1 August 1997.
at 375, 549 S.E.2d at 904.
At closing on 28 July 1997, the
defendant learned there were three outstanding deeds of trust
encumbering the real property. Id.
at 376, 549 S.E.2d at 904. The
defendant was unwilling to close under the circumstances, but she
left the documents and funds necessary for closing at a later date
with her attorney. Id.
The plaintiff's attorney subsequently
informed the defendant's attorney that the deeds of trust would be
canceled and that the plaintiff was prepared to close. Id.
However, on or about 4 August 1997, the defendant's attorney
communicated to the plaintiff's attorney that the defendant wanted
to void the contract and have her earnest money refunded. Id.
376, 549 S.E.2d at 905.
Our Court recognized that the parties' purchase agreement did
not contain a time-is-of-the-essence clause. Id.
at 378, 549
S.E.2d at 906. Therefore, the plaintiff had a reasonable time
after the closing date to perform the contract. Id.
defendant "failed to give [the] plaintiff the thirty days provided
under the contract, or 'reasonable time' provided by existing case
law, to cure the defect. Therefore, when [the] defendant declared
the contract null and void on 4 August 1997_just a week after the
failed closing_she breached the contract." Id.
, the "defendant and [the] defendant's attorney
continued to orally reassure and represent to [the] plaintiff and
her husband that [the] defendant intended to close and consummate
the transaction beyond the 10 March 1981 closing date." Fletcher
314 N.C. at 394, 333 S.E.2d at 735. On 4 August 1981, almost five
months after the scheduled closing, the defendant's attorney
informed the plaintiff's attorney that the defendant was prepared
to close. Id.
at 391, 333 S.E.2d at 733. However, on 24 September
1981, the defendant's attorney returned the plaintiff's earnest
money and sent a letter to the plaintiff's attorney declaring that
the contract was null and void. Id.
at 392, 333 S.E.2d at 733.
Two days later, the plaintiff tendered the full amount that was due
at closing along with a properly executed promissory note for the
balance, as was required by the contract. Id.
The contract didnot contain a time-is-of-the-essence clause. Id.
at 393, 333
S.E.2d at 734.
The Court recognized that "[a] waiver can be defined as an
'excuse of a non-occurrence or of a delay in the occurrence of a
condition of a duty.'" Id.
at 394, 333 S.E.2d at 735 (quoting E.
§ 8.5, at 561 (1982)). "The basis for a
waiver can be inferred from conduct or expressed in words.
'[C]onduct such as continuing performance with knowledge that the
condition has not occurred might be questionable as the
manifestation needed for a modification but sufficient for
(quoting E. Farnsworth, Contracts
§ 8.5, at 562)
(internal citation omitted). Our Supreme Court held that the
defendant had waived the 10 March 1981 closing date. Id.
333 S.E.2d at 735.
Our Supreme Court further held that the trial court's findings
of fact supported the trial court's conclusion that the plaintiff
"'made full and sufficient tender'" within a reasonable time after
receiving notice that the defendant was ready to close. Id.
399, 333 S.E.2d at 738. The Court noted that "[a]lthough it would
have been more desirable for the [trial court] to include within
[its] conclusions of law that [the] plaintiff's tender of
performance was within a 'reasonable time,' we do not think that
omission alone is fatal to the validity and correctness of the
at 399-400, 333 S.E.2d at 738.
In the present case, Defendant does not challenge the trial
court's findings of fact that when Plaintiffs learned that the
permit was invalid, they requested that Defendant correct theproblem and provide them with a valid permit. Defendant then
agreed to obtain a valid permit and applied for a new Septic
Improvements Permit in April 2003. Because these findings are
unchallenged by Defendant, they are binding on appeal. See Johnson
v. Herbie's Place
, 157 N.C. App. 168, 180, 579 S.E.2d 110, 118,
disc. review denied
, 357 N.C. 460, 585 S.E.2d 760 (2003). We hold
that Defendant waived the closing date originally agreed upon by
the parties by agreeing to obtain and provide Plaintiffs a valid
permit. Therefore, the parties had a reasonable time after the
original closing date in which to close. See Dishner Developers
145 N.C. App. at 378, 549 S.E.2d at 906.
Although the trial court determined that Plaintiffs and
Defendant had modified the contract, we hold that Defendant's
conduct was in the nature of a waiver of a condition of the
contract, rather than a modification of the contract. This is
demonstrated by examining the trial court's conclusion in light of
the remainder of the judgment. In White v. Graham
, 72 N.C. App.
436, 325 S.E.2d 497 (1985), our Court stated that:
An elementary North Carolina rule in the
interpretation of judgments is that the
pleadings, issues and other circumstances of
the case must be considered. Judgments must
be interpreted like other written documents,
not by focusing on isolated parts, but as a
whole, in light of practicality and the
intention of the court.
at 441, 325 S.E.2d at 501 (citations omitted).
In the present case, the trial court did not make any findings
or conclusions related to the Statute of Frauds or consideration
sufficient for a contractual modification. This demonstrates thatthe trial court's ruling was in the nature of a finding of waiver
on the part of Defendant, rather than a modification of the
contract by the parties. Also, other conclusions made by the trial
court demonstrate that the trial court concluded that Defendant
waived the closing date in the parties' contract. The trial court
concluded that "Plaintiffs had a reasonable time in which to close
the purchase of the . . . property which reasonable time had not
run as of the date that . . . Defendant attempted to terminate the
contract." This conclusion is in line with the conclusion of law
upheld by our Supreme Court in Fletcher
. In Fletcher
, our Supreme
Court held that the trial court's findings of fact supported the
trial court's conclusion that the plaintiff "'made full and
sufficient tender' within a reasonable time after being notified
that [the] defendant was ready to close." Fletcher
, 314 N.C. at
399, 333 S.E.2d at 738. Moreover, our Supreme Court in Fletcher
upheld the conclusion of law despite the omission that the
plaintiff's tender was within a "reasonable time." Id.
333 S.E.2d at 738. In the case before us, the trial court did
conclude that Plaintiffs' reasonable time to close had not run as
of the date Defendant attempted to terminate the contract.
Our Court has also held that where "a court's ruling [is]
based upon a misapprehension of law, '[but] the misapprehension of
the law does not affect the result[,] . . . the judgment will not
be reversed.'" Smith v. Beaufort County Hosp. Ass'n.
, 141 N.C.
App. 203, 212, 540 S.E.2d 775, 781 (2000) (quoting Bowles
Distributing Co. v. Pabst Brewing Co.
, 69 N.C. App. 341, 348, 317
S.E.2d 684, 689 (1984)), disc. review denied
, 353 N.C. 381, 547S.E.2d 435, aff'd per curiam
, 354 N.C. 212, 552 S.E.2d 139 (2001).
Therefore, in this case, even if the trial court's ruling could be
characterized as misapprehending the law regarding modification,
any misapprehension did not affect the result in the present case.
We hold Defendant waived the original closing date and that
Plaintiffs had a reasonable time after that date in which to
perform. Therefore, because Defendant waived the timeliness of
Plaintiffs' performance, the trial court was not required to make
findings regarding the Statute of Frauds or consideration
sufficient for a modification of the contract.
Defendant further cites Clifford v. River Bend Plantation,
, 312 N.C. 460, 323 S.E.2d 23 (1984), which is
, the plaintiff purchased real property from the
defendant and the property subsequently flooded. Id.
at 462, 323
S.E.2d at 24. The defendant told the plaintiff the house was
"warranted" and sent a letter to the plaintiff stating that
warranties on homes for workmanship, material and subcontractors
were for one year. Id.
When the defendant's efforts to correct
the flooding problem were unsuccessful, the plaintiffs filed suit
against the defendant. Id.
Our Supreme Court held that neither the defendant's statement,
nor the letter, were sufficient to create a warranty. Id.
65, 323 S.E.2d at 26. Moreover, even if they had been sufficient,
neither the statement nor the letter complied with the Statute of
at 465-66, 323 S.E.2d at 26. The Court recognized
that oral modifications of an agreement within the Statute of
Frauds are ineffectual. Id.
at 465, 323 S.E.2d at 26. Furthermore, the letter was ineffectual to modify the contract
because it did not contain all essential elements of a warranty.
at 465-66, 323 S.E.2d at 26. The Court further held that even
if the letter had complied with the Statute of Frauds, the
modification would be unenforceable because of a lack of new
at 466, 323 S.E.2d at 26-27.
In the present case, Defendant argues that Clifford
analogous because the parties in the present case did not
memorialize any contract modification in writing. Defendant
further argues that any contract modification in the present case
lacked new consideration. However, as we have already held,
Defendant waived the closing date set forth in the original
contract. We do not find that the parties modified the contract.
Therefore, no new writing or consideration was required, and
is inapplicable. We hold the trial court did not err.
 Defendant next argues there was insufficient evidence to
support the trial court's finding that at all relevant times,
Plaintiffs were ready, willing, and able to close on the purchase
of the real property. Our Supreme Court has stated:
The remedy of specific performance is
available to "compel a party to do precisely
what he ought to have done without being
coerced by the court." McLean v. Keith
N.C. 59, 71, 72 S.E.2d 44, 53 (1952). The
party claiming the right to specific
performance must show the existence of a valid
contract, its terms, and either full
performance on his part or that he is ready,
willing and able to perform.
Munchak Corp. v. Caldwell
, 301 N.C. 689, 694, 273 S.E.2d 281, 285(1981). "'The term "ready, willing, and able" means that the
prospective purchaser desires to purchase, is willing to enter into
an enforceable contract to purchase, and has the financial and
legal capacity to purchase within the time required on the terms
specified by the seller.'" Resort Realty
, 163 N.C. App. at 118,
593 S.E.2d at 408 (quoting James A. Webster, Jr., Webster's Real
Estate Law in North Carolina
§ 8-11, at 253 (Patrick K. Hetrick &
James B. McLaughlin, Jr. eds., 5th ed. 1999)). "Further, 'the
purchaser indicates readiness and willingness by executing a valid
offer to purchase that either complies with the seller's
requirements as set forth in the listing contract or is accepted by
the seller.'" Id.
at 118, 593 S.E.2d at 409 (quoting James A.
Webster, Jr., Webster's Real Estate Law in North Carolina
In the present case, at the time Plaintiffs and Defendant
entered into the contract, Plaintiffs were provided a Septic
Improvements Permit and Defendant represented to Plaintiffs that
the permit was valid. Under the section of the contract entitled
"Sewer System" the contract provided: "[Plaintiffs] [have]
investigated the costs and expenses to install the sewer system
approved by the Improvement Permit attached hereto as Exhibit A and
hereby approve and accept said Improvement Permit." In
Defendant's letter dated 24 February 2004, Defendant stated as
follows: "In December 2002 [the property] went under contract with
. . . [P]laintiffs with a proposed closing of February 14th
One of the conditions of the purchase was a valid septic tank
permit which was supplied to the buyer." Therefore, becausePlaintiffs and Defendant contemplated the permit in their contract
and because Defendant admitted that a valid permit was a condition
of the contract, we hold that a valid permit was a condition of the
As established by Resort Realty
, a buyer indicates readiness
and willingness to purchase when the buyer "'execut[es] a valid
offer to purchase that . . . is accepted by the seller.'" Resort
, 163 N.C. App. at 118, 593 S.E.2d at 409 (quoting James A.
Webster, Jr., Webster's Real Estate Law in North Carolina
at 253.) Thus, Plaintiffs in this case were ready and willing to
perform when they entered into the contract. Thereafter, it was
discovered that the permit was invalid. Plaintiffs continued to
insist that Defendant provide a valid permit, which was a condition
of the original contract. Defendant agreed to do so and applied
for a new permit, thereby waiving the original closing date. At
that point, Plaintiffs remained ready and willing to perform as
long as Defendant provided a valid permit. Neither Plaintiffs'
readiness, willingness, nor ability to perform were negated by
Plaintiffs' insistence that Defendant comply with the terms of the
original contract. Therefore, we hold that the challenged finding
of fact was supported by the evidence.
 Defendant argues the trial court erred by concluding that
Defendant breached the contract. Defendant argues that Plaintiffs
had previously terminated the contract by their failure to close
the transaction when demanded by Defendant. Defendant argues that
under the parties' contract, Defendant was not required to providePlaintiffs with a valid permit. Therefore, Defendant argues,
Plaintiffs' refusal to close without a valid permit was a breach of
It is well settled that where one party breaches a contract,
the other party is relieved from the obligation to perform.
, 145 N.C. App. at 378-79, 549 S.E.2d at 906
(citing Mizell v. Greensboro Jaycees
, 105 N.C. App. 284, 289, 412
S.E.2d 904, 908 (1992)). In the present case, Defendant was
obligated to provide a valid permit to Plaintiffs. When Defendant
sent a letter to Plaintiffs demanding that Plaintiffs close without
the permit, and then attempted to terminate the contract, Defendant
was in breach of the contract. Therefore, Plaintiffs were relieved
of the duty to perform.
 Defendant also argues that his letter demanding that
Plaintiffs close without a valid permit no later than 4 September
2003 served to make time of the essence. This argument lacks
merit. In support of this argument, Defendant cites Johnson v.
Smith, Scott & Assoc., Inc.
, 77 N.C. App. 386, 335 S.E.2d 205
(1985), where our Court stated: "The contract here does not
expressly provide that time is of the essence, nor do we find
anything in the contract or in the parties' actions which
demonstrate their intent to make time of the essence." Id.
335 S.E.2d at 207. However, Defendant has not cited, nor do we
find, any authority for the proposition that one party may
unilaterally determine that time is of the essence after the
parties have entered into a contract which does not include such a
clause. We hold the trial court did not err by concluding thatDefendant breached the contract.
 Defendant also argues the trial court erred by concluding
that Defendant breached the contract and that Plaintiffs were
entitled to specific performance because the evidence established
that the parties entered into the contract based upon a mutual
mistake of fact. Therefore, Defendant argues he was entitled to
rescind the contract.
In MacKay v. McIntosh
, 270 N.C. 69, 153 S.E.2d 800 (1967), our
Supreme Court recognized:
"The formation of a binding contract may be
affected by a mistake. Thus, a contract may
be avoided on the ground of mutual mistake of
fact where the mistake is common to both
parties and by reason of it each has done what
neither intended. Furthermore, a defense may
be asserted when there is a mutual mistake of
the parties as to the subject matter, the
price, or the terms, going to show the want of
a consensus ad idem
. Generally speaking,
however, in order to affect the binding force
of a contract, the mistake must be of an
existing or past fact which is material; it
must be as to a fact which enters into and
forms the basis of the contract, or in other
words it must be of the essence of the
agreement, the sine qua non
, or, as is
sometimes said, the efficient cause of the
agreement, and must be such that it animates
and controls the conduct of the parties."
at 73, 153 S.E.2d at 804 (quoting 17 Am. Jur. 2d, Contracts §
143). However, in the present case, we need not decide whether
Plaintiffs and Defendant entered into the contract under a mutual
mistake of fact. Even assuming the existence of a mutual mistake
of fact as to the validity of the permit, we hold that Defendant
waived any opportunity to avoid the contract on this basis. A waiver is sometimes defined to be an
intentional relinquishment of a known right.
The act must be voluntary and must indicate an
intention or election to dispense with
something of value or to forego some advantage
which the party waiving it might at his option
have insisted upon. The waiver of an
agreement or of a stipulation or condition in
a contract may be expressed or may arise from
the acts and conduct of the party which would
naturally and properly give rise to an
inference that the party intended to waive the
agreement. Where a person with full knowledge
of all the essential facts dispenses with the
performance of something which he has the
right to exact, he therefore waives his rights
to later insist upon a performance. A person
may expressly dispense with the right by a
declaration to that effect, or he may do so
with the same result by conduct which
naturally and justly leads the other party to
believe that he has so dispensed with the
Guerry v. Trust Co.
, 234 N.C. 644, 648, 68 S.E.2d 272, 275 (1951).
In the present case, after it was discovered that the permit
provided by Defendant was invalid, Defendant agreed to obtain a
valid permit, and applied for a new permit. We hold that by these
actions, Defendant waived any ability to avoid the contract on the
ground of mutual mistake. It is clear that after Plaintiffs and
Defendant entered into the contract, Defendant learned the permit
was invalid. At that point in time, even assuming that Defendant
had the right to avoid the contract on the ground of mutual mistake
of fact, Defendant chose to waive that right. Defendant could not
thereafter unilaterally resurrect the right he had previously
waived. Therefore, the trial court did not err.
Judges LEVINSON and JACKSON concur.
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