Sale Rescission for Failure to Obtain Building Permit by Deadline

A contract for the sale of land included a clause requiring the buyer to obtain a building permit within a specified period, with failure to do so leading to automatic rescission of the sale. When the buyer failed to obtain the necessary authorization within the stipulated time, the seller sought rescission, but the lower court rejected the claim, finding the condition suspensive and arguing that the seller, by delaying the necessary administrative steps, had prevented the condition from being met. The high court quashed the decision, reasoning that the contractual stipulation making the agreement subject to the buyer obtaining the permit by a certain date, under penalty of automatic termination, made the obligation of the buyer an essential obligation whose non-performance, regardless of fault or external cause, triggered the agreed-upon sanction of rescission, meaning the court could not substitute its own assessment of the good faith of the parties for the express contractual terms agreed upon regarding the penalty for non-observance of the deadline.