Kotkin v. Aronson: Buyers Can Terminate Purchase Contract for Radon Gas Presence

In August 2000, Ross and Audrey Kotkin ("Buyers") entered into a contract to purchase the home of Estelle and Bernard Aronson ("Sellers"). The contract was a form sales contract completed by the Sellers' real estate salesperson. The contract stated that the Buyers could terminate the agreement and receive a refund of their deposit if an inspection revealed the presence of specified environmental conditions on the property, such as asbestos or toxic substances, unless the Sellers agreed in writing to repair the condition at their own expense.

The Buyers' inspection discovered radon gas on the property. The Sellers attempted to correct the problem by reducing the radon gas on the premises to an allegedly safe level. However, radon gas could still be detected on the premises. Therefore, the Buyers asserted that the agreement was terminated and sought a return of their deposit. When the Sellers refused to return the deposit, the Buyers filed a lawsuit seeking the amount of their deposit. The trial court awarded the Buyers the amount of their deposit, finding that the agreement did not specify an acceptable level of radon gas and so the purchase contract could be terminated if any level of radon gas was detected on the premises. The appellate court affirmed, and the Sellers appealed.

The Supreme Court of New Jersey affirmed the rulings of the lower courts. The court found that the purchase contract gave the Buyers the right to terminate if radon gas was detected on the premises. The agreement failed to specify an acceptable level of radon gas, and so the court found that the Buyers had the right to terminate if any level of radon gas could be detected. The court stated that "it cannot make for sellers a better or more sensible contract than the one they made for themselves," and added that even if the court found an ambiguity in the contract, the ambiguity would be construed against the Sellers because their real estate salesperson had provided the form contract. The court encouraged future contract drafters to set forth an acceptable level of radon gas in order to avoid disputes like this one. Thus, the court affirmed the rulings of the lower courts and awarded the Buyers their deposit.

Kotkin v. Aronson, 815 A.2d 962 (N.J. 2003).

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