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Abrams (P) entered into a contract with Motter (D) to purchase the Angelo residence. The purchase price of the house and lot was set at $205,000 of which $160,000 was to be cash to P and $45,000 in a promissory note secured by a deed of trust second to the first deed so that D could finance the cash payment to P. The contract contained a subject to clause such that “Buyer obtain a $100,000 first trust deed loan with interest not to exceed 6.75% payable not more than $649 per month including interest, at Buyer’s expense.” The escrow was to close January 13, 1965. The attorney for D advised P that D was not going to buy the residence because he could not get financing. In reliance on the contract, P had already purchased another residence. P advised D that he would keep the escrow open until the scheduled close date and after that P then listed the residence with a brokerage for resale. P sued D for specific performance and damages. Eventually, the house sold for $165,000 on November 8, 1965. P incurred the costs of living in the residence until it was sold and a termite fee and escrow fee when it was finally sold as well as broker commissions. The trial court held that D had breached the implied covenant to use due diligence to obtain financing. D appealed.

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