This section contains the nature of the case and procedural background.

Ps were seeking an investment that would give them retirement income and tax benefit. Ds were builders of apartment complexes. D did not build for resale but only for its own account and expected to own and manage the apartments it built. D was approached by a realtor representing P, and they indicated they would sell for the right price. The apartment complex consisted of five buildings. A contract was prepared, and the sales price as agreed to be $700,000 with $85,000 down. The contract included two clauses on the bottom of page 1148 Rabin 4th and the top of page 1149. The sale occurred in December 1976. In 1980 some problems with outside stairways were addressed and eventually it was found that the foundations were not adequately designed to accommodate the soil conditions. It was determined that D had built to the exact specifications of the City even though it turned out that those specifications did not meet the City's building code. The trial court found there was an implied warranty and held for P. D appealed.

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