Halpert v. Rosenthal

Before agreeing to buy Halpert's (plaintiff) house, Rosenthal (defendant) and his brother-in-law separately asked Halpert and her real estate agent whether the house had a termite problem, and both times were told no; just before signing the purchase agreement, which included a merger clause, the agent again told Rosenthal an inspection was unnecessary. A termite infestation was discovered before closing, and Rosenthal refused to close, prompting Halpert to sue for breach of contract while Rosenthal counterclaimed for return of his deposit, arguing the house's condition had been misrepresented. A jury found for Rosenthal, and Halpert appealed, arguing any misrepresentation was innocent and that the merger clause barred Rosenthal's counterclaim regardless.