PMC, Inc. v. Porthole Yachts, Ltd.

This case involves the question of who is entitled to recover the deposit in an aborted boat purchase. The trial court awarded the deposit to PMC, Inc. (PMC), the buyer in the transaction. Porthole Yachts, Ltd. (Porthole), the seller, contends the trial court erred in finding PMC failed to accept a proposed modification concerning a marine survey contingency. Alternatively, Porthole argues PMC’s decision to reject the survey was not made in good faith. We conclude both contentions are without merit and affirm.

Facts

In July 1993, the parties executed a “Purchase Agreement,” whereby PMC agreed to buy a 104-foot Garden motorsailer named the Ami A from Porthole in return for payment of $2.1 million and the transfer of title to a ketch named the Legend, valued at $400,000. PMC deposited $200,000 with Ardell Yacht and Ship Brokers (Ardell), a licensed ship brokerage representing it in the transaction.

' The transaction was contingent on the completion of a trial ran and marine survey on each vessel “to the satisfaction of’ the acquiring party. A trial run means taking the vessel out to see how it handles on the water, and a marine survey involves a third party’s inspection…