215 S.E.2d 102 (N.C. 1975)
- The court of appeals held that the purchaser was entitled to rescind the contract on the grounds of mutual mistake of material fact coupled with a total failure of consideration.
- The court expressly rejected this theory as a basis for rescission.
- The court held, however, that where a grantor conveyed land subject to restrictive covenants that limited its use to the construction of a single-family dwelling, and, due to subsequent disclosures, both unknown to and not reasonably discoverable by the grantee before or at the time of conveyance, the property could not have been used by the grantee, or by any subsequent grantees through mesne conveyances, for the specific purpose to which its use is limited by the restrictive covenants, the grantor breached an implied warranty arising out of said restrictive covenants.
- Therefore, the sellers breached the implied warranty and the purchaser, by timely notice of the defect, once it was discovered, was entitled to full restitution of the purchase price, provided that she executed and delivered a deed reconveying the subject lot to the sellers.
The court modified the judgment and, as modified, affirmed the judgment.
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