Western Hills, Oregon, Ltd. v. Pfau

Pfau and other buyers (defendants) agreed to buy 286 acres from Western Hills (plaintiff) for a planned development, with closing conditioned on receiving city approval satisfactory to the buyers; at signing, the buyers already knew the development would require costly private sewage facilities since city sewage service was unavailable. After the city gave no indication their proposal would be denied, the buyers abandoned the project solely because of the private-sewage costs and refused to close, and Western Hills sued for specific performance; the trial court ruled for Western Hills, and the buyers appealed.

Whether a real-estate purchaser conditioned on receiving development approval satisfactory to the purchaser may be excused from performance based on development costs the purchaser already knew about when signing the contract.