FACTS:                 

Buyer sent Seller a Residential Buyer’s Inspection Notice and Seller’s Response (“BINSR”) providing the Seller the opportunity to correct disapproved items.

Within three days, the Seller agreed to correct the disapproved items, and indicated so by sending the BINSR back to the Buyer, with the Seller’s signature on the bottom of page two.  The Buyer signed the BINSR, and accepted the Seller’s response.

The next day, the Seller received a full-price offer from a different buyer.  The Seller, believing she was still within her five day response period, then instructed her agent to draft a second BINSR indicating the Seller would not make any repairs, and sent it to the first Buyer.  The Seller also stated she was withdrawing the first BINSR.

ISSUE:                  

Can the Seller issue two different BINSR’s within the five day response period?

ANSWER:                

No.

DISCUSSION:    

There is an implied covenant of good faith and fair dealing in every contract. Lombardo v. Albu, 199 Ariz. 97, 14 P.3d 288 (Ariz. 2000).  Pursuant to the contract, the Seller agreed, in writing, to repair the items disapproved through the first BINSR.  The Buyer accepted the Seller’s response.  The two parties had a mutually signed agreement.  Therefore, under the contract, and pursuant to the covenant of good faith and fair dealing, the Seller may not withdraw acceptance and must proceed with repairing the items the Buyer disapproved of.

Note: Similar to the Buyer’s single notice requirement in the contract, if the Seller’s BINSR response is signed and delivered to the Buyer, then the Seller’s five day period ended upon delivery of the Seller’s response to the Buyer.