Seller's Failure to Disclose Permit Refusal Breach of Good Faith

A defendant, having entered into a contract of sale for property contingent upon obtaining a necessary building permit, subsequently failed to disclose to the buyer that the required administrative authority had issued a notice indicating the permit would be refused due to the existing zoning regulations, leading the buyer to pay the full price without realizing the condition precedent would not be met. The court overturned the lower court's decision, reasoning that the seller's failure to inform the buyer of the impending refusal of the permit constituted a breach of the contractual obligation of good faith, as the seller knew the condition essential to the contract's finalization would fail, thereby justifying the buyer's subsequent request for contract rescission and damages.